Apple has made impressive gains in 2024, trading upwards by 26% and becoming closely matched with the S&P 500 in 2024. Apple is leading as the world’s largest company by market cap at $3.56 trillion. Even though the company is leading among its competitors, Apple may be facing threats from regulation and geopolitical tensions.
Q4 Earnings
Apple recently reported Q4 earnings that exceeded analysts’ expectations, which led to an immediate spike in its stock price. EPS came in at a $0.4 increase from its forecast and a $51 million increase in revenue from its forecast.
Apple’s growth was driven by a combination of strong product sales, particularly in the iPhone and wearables segments, and a well-executed strategy in services, such as iCloud and Apple Music.
These results underscore Apple’s ability to maintain its position as a market leader despite challenges like supply chain disruptions and global economic uncertainties.
Apple’s successful transition to services has been one of the main drivers of its success. Since hardware sales have declined recently, services have become more important as a source of income for the business.
This change in strategy has increased margins and diversified Apple’s revenue sources while assisting the company in navigating hardware demand downturns.
Recent Highlights
Apple intends to invest $1 billion in a manufacturing facility in Indonesia. This strategic move shows Apple’s dedication to growing in emerging markets while abiding by local regulations and is in line with Indonesia’s local content laws.
Apple CEO Tim Cook explained Apple’s AI plan and talked about the Vision Pro headset which combines augmented reality (AR) and virtual reality (VR).
He also stated that the Vision Pro headset remains the Spatial computer that enables users to merge real-world objects with digital content through the vision OS. The device can be operated through eyes, hands, and voice, presenting new opportunities for augmented and virtual reality. It enables multi-windows on apps, such as Microsoft 365, FaceTime’s Spatial Audio, and presence in immersive spaces.
Apple is actively developing an enhanced version of Siri that promises more natural, conversational interactions, akin to the capabilities seen in OpenAI’s ChatGPT. This initiative is part of Apple’s broader ambition to assert its presence in the artificial intelligence (AI) domain.
Risks
Apple’s dominance in the tech industry has not gone unnoticed by regulators. In March 2024, the European Commission fined the company €1.8 billion for abusing its position in the music streaming market, marking another chapter in ongoing antitrust scrutiny.
Similar investigations are underway in the U.S., focusing on its App Store practices. These regulatory challenges underscore the growing pressure on Apple to adapt its business model to comply with evolving legal frameworks while defending its ecosystem’s integrity.
Apple’s reliance on a global supply chain also exposes it to geopolitical tensions and manufacturing disruptions.
While its investment in Indonesian manufacturing shows a proactive approach to diversifying production, the company remains heavily dependent on China, which is both a major manufacturing hub and a key market.
Rising U.S.-China tensions could disrupt Apple’s operations and negatively impact sales in one of its largest markets. President-elect Trump has stated his intention to impose import tariffs from China, which could have a major impact on Apple’s production costs.
Apple also faces risks from iPhone sales, which slowed in 2024, along with rising competition from Android-based manufacturers, especially from China, where local products are sold at competitive prices.
Technical Analysis
Source: TradingView
AAPL is in a strong uptrend after the price formed a breakout from $220 where momentum was strong and breached several technical levels which caused the formation of new highs.
The 14-day period RSI shows the stock price is in overbought territory, with a reading of 76.67—a potentially bearish signal. If price is unable to hold on to gains, traders will be watching for a move lower towards the $235 level where support might be formed.
If AAPL continues a bullish upward trend, traders will be anticipating the formation of new highs, with potential resistance around $248.
