Apple (AAPL +0.33%) has made a lot of headlines this year after unveiling its highly anticipated virtual/augmented reality (VR/AR) headset and becoming the first company to achieve a market cap of $3 trillion. As a result, the tech giant is probably on your radar for potential investment.
However, investing in a company that has already achieved so much can feel risky, as you might question how much room there realistically is left to expand. The good news is this isn't a massive issue in the tech industry. The sector's naturally innovative nature keeps it in a constant state of development, offering companies consistent long-term gains.
Meanwhile, Apple's dominance suggests it could benefit most in the future from technological advances, especially from the consumer-focused side of the market.
Here's why Apple's stock is a screaming long-term buy.
A lucrative future in artificial intelligence
All eyes have been on artificial intelligence (AI) this year, with the market projected to expand at a compound annual growth rate of 37% through 2030. As a result, companies that are very publicly focused on developing the sector, like Nvidia, Microsoft, Alphabet, and Amazon, have rallied investors. However, Apple could play a crucial role in the future of AI, even if it isn't super vocal about it.
Unlike many of its peers, Apple seems strategically intent on avoiding the term AI. While other companies are heavily using the phrase to garner investor support, the iPhone company is instead focused on debuting new software features that are quietly enabled by AI. In doing so, Apple is protecting its brand by making it harder to lump its business in with the other big names in AI and avoid comparisons. This strategy can reduce volatility in Apple's stock, as it won't be harshly affected by fluctuations in the AI market.
NASDAQ: AAPL
Key Data Points
However, the dominance of its products means it will likely be the main driver of AI adoption by the public. At Apple's Worldwide Developer Conference in June, it unveiled several new AI-run software features. Improvements to the iPhone's autocorrect use a transformer language model, the same technology that led to OpenAI's ChatGPT. However, while other companies utilize massive server farms to run similar AI workloads, Apple impressively gets the job done directly on the iPhone.
In addition to its smartphone, the company has brought AI upgrades to the AirPod Pros, which can automatically turn off noise canceling when the user is in a conversation. As Apple continues to develop alongside AI, other products in its lineup will likely get upgrades, which could bolster consumer interest and revenue over the long term.
Apple is an unstoppable force in consumer tech
Economic declines hurt countless tech companies last year as inflation hikes caused reductions in consumer spending. The situation continued to challenge companies into the first quarter of 2023, with research from Counterpoint showing smartphone shipments fell by 17% year over year.
As a result, Samsung's smartphone market share in the U.S. stagnated at 27% for the quarter. Meanwhile, Motorola's decreased from 10% to 8%. However, the iPhone's massive dominance in the sector allowed it to take advantage of poor market conditions, with Apple's market share rising from 49% to 53% in Q1 2023.
Moreover, a similar phenomenon occurred in the personal computing industry. According to IDC, PC shipments tumbled 13% in Q2 2023, with companies like Lenovo and Dell experiencing declines of 18% and 22%. However, the same period saw Apple enjoy the only rise in PC shipments among its biggest competitors, with Mac shipments up 10% year over year.
This tech stock has proven its resilience amid uncertain market conditions and consumers' preferences for its products. This means that alongside a promising future in AI and a stock that has risen roughly 300% in the last five years, Apple is a no-brainer buy right now.
