Apple’s stock price reflects how it is a “declining company,” said Bill Miller IV.
According to Miller Value Partners chairman, I think Apple needs to tell the market that it’s a growth company and a declining company.
Apple’s stock has taken a hit in recent weeks due to China’s partial ban on iPhones.
Apple’s current stock market valuation reflects unrealistic growth expectations, according to the chairman of Miller Value Partners.
The iPhone and iPad maker is the most valuable company in the world, with a current market capitalization of around $2.73 trillion. The measure briefly surpassed $3 trillion earlier this year, the only stock to reach that level.
Given the broad size of the tech giant’s revenue base, it will be difficult to deliver growth rates that meet the needs of investors who are held back by the stock price, the fund manager suggested. Apple and other big tech stocks are now trading at “so high” multiples of earnings that a handful of such names account for a third of the total market capitalization, he added.
“Someone needs to tell the market that Apple is a declining growth company,” said Bill Miller IV, son of veteran fund manager Bill Miller. CNBC interview Wednesday.
“If you just think about what it takes for Apple to grow from a $395 billion revenue base, the economy grew 6% in Q2. Let’s take 6% from $395 billion, that’s $24 billion in revenue. That’s McDonald’s revenue, that’s Charles Schwab.” “It took decades to create these companies,” he said.
“So it’s really hard to grow from that base, but it’s trading at 30x earnings, which shows great promise for continued growth,” Miller IV continued.
Big tech shares have soared this year, fueled by investor excitement over the transformative business potential of artificial intelligence. The event saw megacap stocks such as Apple, Microsoft, Amazon, Nvidia and Alphabet powerhouses in the S&P 500 despite widespread recession fears this year.
Apple’s stock has taken a hit after a few weeks China has banned its government officials from using iPhones. At work, amid Washington-Beijing tensions. The company lost nearly $200 billion in market value in two days amid fears of a broader crackdown by China.
“There’s a real limit to what these companies can do. If you think about Apple’s growth, if it’s too big or too scalable in the past, if you think about what it takes to grow, it’s very, very challenging and yes, you can cut things, but you’re stuck here,” Miller IV added.
Still, there are some market experts who remain bullish on Apple. Wedbush’s Dan Ives says he expects a. 20% off for stock, Thanks for launching the new iPhone 15.
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