The Biggest Threat to Apple Inc. (AAPL)’s Share Price: Google Inc (GOOG)

Can we all have a little patience?
UBS analyst Steve Miluovich reiterated his buy rating on Apple Tuesday morning, setting a $600 price target, but warning that investors will need to be patient: “The only way out might be innovation in new categories, which will require investor patience. Most companies would rush out a 5-6″ phone; Apple probably won’t.” With investors clamoring for an iWatch, a cheap iPhone and Apple TV, Apple seems content to press forward at its own pace.

The threat of $400
Despite all of the above, the biggest threat to Apple shares at this point is a sell-off or correction in the broader market. Some would argue that after a 40% decline, the shares should be well insulated from the vagaries of the major indexes. Apple shares had no problem declining as the market fought to the new historic highs, so why should they have a problem moving higher if the market comes under pressure? The problem is that, as things stand, the company is not standing out as the beacon of technological progress that it once did.

If Apple is able to bring a new product to market and attract some positive attention, this may be the catalyst needed to put the stock back onto its own trajectory. If, however, as Milunovich suggests, Apple takes its time bringing anything new to market, that could trigger a disconnection from the broader trend, a correction will likely see shares dragged lower. If the psychologically important $400-per-share level is breached, you should expect a spike lower, if only briefly. Stops losses will be triggered and some investors will see this as a sign that the stock is in trouble. This spike, if it occurs, will likely be the best buying opportunity available for some time. Overall, the general market’s direction remains the biggest threat to Apple going lower, so macro factors should become increasingly important to Apple shareholders.

The article The Biggest Threat to Apple’s Share Price originally appeared on Fool.com and is written by Doug Ehrman.

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

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