Jim Cramer’s Top 10 Stock Picks You Can’t Ignore

2. Apple Inc. (NASDAQ:AAPL) 

Number of Hedge Fund Investors: 184

Jim Cramer explained that money flowed out of stocks like Apple Inc. (NASDAQ:AAPL) after reports from several firms suggested weak pre-orders for the new iPhone 16. This news led to a significant sell-off in Apple Inc. (NASDAQ:AAPL) related stocks.

“The money poured out of stocks like Apple on word from a few firms that the weekend’s pre-orders for the new iPhone 16 were anemic (more on that later). All you need to know is that it caused an eruption of selling in anything connected to Apple.”

Apple Inc. (NASDAQ:AAPL) presents a strong investment case due to several key factors. The recent introduction of the iPhone 16, which includes advanced AI features, is expected to spark a major upgrade cycle, with analysts forecasting sales of up to 240 million units due to high pent-up demand.

Additionally, Apple Inc. (NASDAQ:AAPL)’s focus on integrating AI across its entire product range, including iPhones, iPads, and Macs, aims to enhance user experiences and create new revenue opportunities. Combined with impressive growth in its services sector and strong profit margins, these factors contribute to a favorable long-term outlook for Apple Inc. (NASDAQ:AAPL), with analysts predicting a potential price increase of about 25%.

Baron Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:

“The Fund’s chief relative detractor was Apple Inc. (NASDAQ:AAPL), even though it was a meaningful contributor to absolute performance, as we added to our Apple position significantly during the period. We bought Apple well, but in 20/20 hindsight we didn’t buy enough. Because Apple has an oversized weight in the Benchmark (its average weight was 15.7% for the period), when Apple’s stock outperforms (it appreciated 23.0%), it has generally been a headwind to relative performance.

Our Apple underweight accounted for 33% of our relative underperformance for the period. This quarter we increased the size of our position in Apple Inc., a leading technology company known for its innovative consumer electronics products like the iPhone, MacBook, iPad, and Apple Watch. Apple is a leader across its categories and geographies, with a growing installed base that now exceeds 2 billion devices globally.

The company’s attached services – including the App Store, iCloud, Apple TV+, Apple Music, and Apple Pay – provide a higher margin, recurring revenue stream that both enhances the value proposition for its hardware products and improves the financial profile. Apple now has well over 1 billion subscribers paying for these services, more than double the number it had just 4 years ago…” (Click here to read more)