Apple’s stock had been climbing in 2023 until August hit. This has given bearish traders an opportunity to profit from the recent decline. August and September can historically be slow months for stocks, so it could be a temporary speed bump.
However, a closer look at its fundamentals could paint a bigger picture. As consumers continue to deal with relatively high inflation, this could be putting a dent in Apple’s sales.
“Apple Inc. just reported its third-quarter results for its 2023 fiscal year, which saw revenue fall 1% year-over-year,” a Direxion Xchange blog noted, adding that the iPhone maker has seen its “sales slip across various devices, including the iPhone, Mac, and iPad” with the primary concern being that “it was the third consecutive quarter that revenue declined, which at this point, could be considered a trend.”
In order to diversify its revenue sources, Apple has entered the big tech arms race. Primarily, it is shoring up its artificial intelligence (AI) technology. However, Apple competes against the other big tech AI players like Google, Amazon, and Microsoft. According to some Wall Street analysts, the company has some catching up to do.
“Some analysts have also become concerned that Apple Inc. is falling behind in the artificial intelligence (AI) race,” the blog added further. “The company has not announced any plans to commercialize or release a unique AI product to the public, like some other tech giants. That being said, Apple Inc. is investing heavily in research and development on artificial intelligence.”
2 Alternate Ways to Trade Apple
Single-stock exchange traded funds (ETFs) offer an alternate way to get exposure to Apple shares. They could also maximize profit potential using leverage without having to utilize a margin account. If the bearish tone in Apple continues, then traders can use the Direxion Daily AAPL Bear 1X Shares (AAPD).
Alternatively, if traders think that Apple’s stock has fallen to an area of value relative to price, then they may want to consider using the Direxion Daily AAPL Bull 1.5X (AAPU). The fund adds 50% more exposure to additional profit potential if Apple’s stock trends higher. This could be the case if it ramps up its AI capability.
“Fears surrounding Apple’s position in artificial intelligence may be overstated in the short-term,” the blog added further. “Part of Apple’s brand has been built on debuting products at the right time, and some if its initial experiments with AI implementation have included the autocorrect feature on iPhones.”
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