Key insights
- The article discusses Apple's growth under Tim Cook, highlighting a significant increase in market capitalization relative to profit growth. The author suggests that AAPL may be overvalued, potentially facing a substantial correction due to slowing growth compared to its earlier high-growth phase. This could negatively impact market sentiment towards large-cap tech stocks.
The news says this "Over 15 years, Mr. Cook has engineered Apple’s rise from a Silicon Valley darling worth $350 billion into a cash-generating giant worth $4 trillion. The company’s annual revenue quadrupled, and its profits rose fourfold."
This strikes me as a bubble, the company is worth about 11X what it was (350B to 4T) but the profits only went up 4X. Plus 15 years ago, the company was arguably in a high growth phase as iPhone/iPad sales were rocketing year on year. Today thats not at all the case.
To me the stock could fall 2/3 and then be appropriately valued, back to 2011 levels but still not looking as good since they're no longer in an high growth phase.
Or maybe 2011 AAPL was too amazing of a buy but people didn't notice.