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Apple is one of the most valuable companies in the world and has consistently rewarded investors with strong returns over the past two decades. Its simply-designed and innovative products have been highly sought after by consumers for years, and the iPhone, iPad, AirPods and Apple Watch have transformed the categories they compete in.
In 2018 Apple became the first publicly traded company to surpass $1 trillion in market value, and was worth more than $2.7 trillion as of August 2022. The company’s products are synonymous with luxury in the tech industry and have become so intertwined in people’s lives that many can’t live without them.
Here’s what else you should know about investing in Apple and how to buy shares in the tech giant.
- Apple is the most valuable company in the S&P 500 as of August 2022 and has a market value of more than $2.7 trillion.
- Apple earned nearly $109 billion in operating income and $5.61 in diluted earnings per share during its 2021 fiscal year.
- Apple CEO Tim Cook took over for Steve Jobs in August 2011 after Jobs resigned due to health reasons. Cook has a net worth of about $2 billion, according to Forbes.
- Apple TV+ shows received 52 Emmy Award nominations in 2022 for series such as “Ted Lasso” and “The Morning Show.”
- The iPhone is Apple’s best-selling product, generating $192 billion in revenue and accounting for more than 52 percent of overall sales in 2021.
- Apple has split its stock five times since going public, with the most recent split being on a 4-for-1 basis on August 28, 2020.
- Apple is expected to announce new iPhones and Apple Watches at a September 2022 event.
- In May 2022, the European Union charged Apple with antitrust violations, accusing the company of restricting access to its contactless payments technology.
Apple’s recent developments
- August 24, 2022: Apple announces a new product launch event for September 7, when it’s expected to debut new iPhones and Apple Watches.
- July 28, 2022: Apple releases its fiscal third-quarter financial results, showing record revenue of $83.0 billion and generating nearly $23 billion in operating cash flow.
- July 12, 2022: Apple TV+, the company’s streaming service, received 52 Emmy Award nominations for shows such as “Ted Lasso,” “Severance” and “The Morning Show.”
- June 14, 2022: Apple announced a 10-year deal to broadcast every live Major League Soccer match through the Apple TV app starting in 2023.
- June 6, 2022: At its Worldwide Developers Conference, Apple announced a new MacBook Air and 13-inch MacBook Pro, as well as new operating systems for the iPhone, iPad, Mac and Apple Watch.
- May 5, 2022: Along with Google and Microsoft, Apple announced plans to expand support for a password-less sign-in standard that it hopes will be more convenient and secure.
- May 2, 2022: The European Union charged Apple with antitrust violations, accusing the company of restricting access to contactless payments technology.
- March 30, 2022: Apple launched a $50 million supplier employee development fund that it said would expand development opportunities for workers throughout its supply chain.
How to buy Apple stock
1. Analyze Apple and its financials
Analyzing a company’s competitive position and financials is probably the single hardest part of buying the stock, but it’s also the most important. The best place to begin is with the company’s Form 10-K, which is the annual report that all publicly traded companies must file with the SEC.
The 10-K can help you understand a lot about the company:
- how it makes money and how much
- its assets and liabilities
- its profitability trend over time
- the competitive landscape
- the various risks faced by the business
- the management team and how they’re incentivized
The annual report is a great first step at finding out about the company, but you’ll want to do more than this. You’ll want to study what other companies are doing to compete, because it’s important to have a broader perspective on the industry.
For example, Apple competes with the largest companies in the world, all of which have deep financial resources and can attract the smartest employees. Rivals include Microsoft, Google and Meta Platforms (Facebook) where they battle for market share across various domains, such as smartphones, communication apps and office productivity software. Each company has its own agenda in the tech world, and that does not always coincide with how Apple is strategizing.
2. Does Apple make sense in your portfolio?
Apple has been a fantastic performer for many years, and in 2021 the company earned nearly $100 billion, about 70 percent more than it had just two years before. But you’ll need to keep an eye on this growth stock, because the tech world is all about disrupting the established players such as Apple. While legendary investor Warren Buffett’s company, Berkshire Hathaway, owns millions of shares in the stock, that may not mean it’s right for you. Apple does pay shareholders a quarterly dividend, making it more attractive for certain investors who want to earn passive income.
So you’ll want to consider the following questions:
- Do you understand the business and its future prospects?
- Will you be able to continue analyzing the business and industry as it grows?
- Given that stocks can be volatile, will you be able to hold on if it drops or even buy more?
- Do you have a sense of what the company is worth and how that compares to the current market value?
- Apple pays a dividend – does that fit your needs?
3. How much can you afford to invest?
How much you can afford to invest has less to do with Apple than with your own personal financial situation. Stocks can be volatile. So, to give your investment time to work out, you’ll likely want to be able to leave the money in the stock for at least three-to-five years. That means you should be able to live without the money for at least that length of time.
Committing to holding the stock for three-to-five years is important. You’d hate to have to sell the stock when it’s near a low only to watch it rebound much higher after you exited the position. By sticking to a long-term plan, you’ll be able to ride out the ups and downs of the stock.
If you’re investing in individual stocks, you’ll likely want to keep the percentage of any single position between 3 and 5 percent. This way you’re not heavily exposed to one investment breaking your portfolio. If the stock has more business risk, then you might choose an even lower percentage than this range.
In addition, rather than just committing a one-time sum of money to the stock, consider how you can add money to your position over time.
4. Open a brokerage account
While opening a brokerage account may sound like a difficult step, it’s actually quite easy, and you can have everything set up in 15 minutes or so.
You’ll want to select a broker that caters to your needs. Are you trading often or infrequently? Do you need a high level of service or research? Is cost the most important factor for you? If you’re buying a few stocks but investing mainly in funds, then a number of brokers specialize in offering commission-free trading for those funds.
After you’ve opened your account, you’ll want to fund it with enough money to buy Apple stock. But you can take care of this step completely online, and it’s simple.
With Apple shares trading around $170 per share as of August 2022, you may not have enough money to buy an entire share. Several brokers, including Charles Schwab and Fidelity, have started offering fractional shares to help with this problem, allowing you to invest with just a few dollars.
5. Buy Apple stock
Once you’ve decided to buy Apple stock and you’ve opened and funded your brokerage account, you can set up your order. Use the company’s ticker symbol – AAPL – when you input your order.
Most brokers have a “trade ticket” at the bottom of each page, so you can enter your order. On the broker’s order form, you’ll input the symbol and how many shares you can afford, or the amount you’d like to invest if you’re buying fractional shares. Then you’ll enter the order type: market or limit. A market order will buy the stock at whatever the current price is, while the limit order will execute only if the stock reaches the price that you specify.
If you’re buying just a few shares, then you’re likely best off sticking with a market order. Even if you pay a little bit more now for a market order, it won’t affect the long-term performance much, if the stock continues to perform well.
Buying a stock can be exciting, but success won’t happen overnight. Investors should take a long-term perspective on their investments, and they should consider taking advantage of dollar-cost averaging, if they believe in the stock for the long haul.
With dollar-cost averaging, investors add a set amount of money to their position over time, and that really helps when a stock declines, allowing them to purchase more shares. High-flying stocks can dip from time-to-time, so the strategy can help you achieve a lower buy price and higher overall profits.
- How profitable is Apple? In its fiscal year ending September 25, 2021, Apple earned nearly $109 billion in operating income and diluted earnings per share of $5.61.
- Who are Apple’s largest shareholders? Apple’s largest shareholders as of June 30, 2022 are The Vanguard Group, BlackRock and Berkshire Hathaway. The three firms hold nearly 20 percent of Apple’s outstanding shares, according to SEC filings.
- Who is Apple’s CEO? Tim Cook was named Apple CEO in August 2011 after Steve Jobs resigned due to health reasons. Prior to taking over as CEO, Cook served as Apple’s Chief Operating Officer and was responsible for its worldwide sales and operations.
- How many shares of Apple stock are there? As of June 25, 2022, Apple had 16.2 billion shares outstanding, or 16.3 billion diluted shares, which account for things such as stock options.
- Does Apple pay a dividend? Yes, Apple pays a regular cash dividend of $0.23 per share each quarter, which may be increased over time.
- Has Apple ever split its stock? Yes, Apple has split its stock five times since going public, with the most recent split being on a 4-for-1 basis on August 28, 2020.
- What were Apple’s sales in 2021? In its most recent fiscal year, Apple generated $365.8 billion in net sales. The company is expected to generate $392.6 billion in sales in its fiscal year ending September 2022.
- What is Apple’s best selling product? The iPhone is Apple’s best selling product, generating $192 billion in revenue and accounting for more than 52 percent of overall sales in 2021.
- Who is Apple’s biggest competitor? Apple faces competition from a number of companies in categories such as smartphones, personal computers, tablets and more. Google, Microsoft and Amazon would all be considered major competitors to Apple.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.