Apple Stock is a Top Holding in These Tech ETFs

Will Thursday’s highly anticipated earnings report reverse the stock’s recent downturn?

kent
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Research Lead
Reviewed by: etf.com Staff
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Edited by: James Rubin

Consumer electronics giant Apple Inc. announces its latest financial results post-market Thursday amid various headwinds, including missed growth expectations, increased competition and increasing perceptions that it is not as innovative as it once was.

APPL stock rose 3% on Monday amid investor hopes that the Cupertino, Calif.-based company would build on the same artificial intelligence momentum that has recently swept Microsoft and other tech firms upward. But AAPL is down nearly 12% for the year. 

This poor performance has been a drag on many tech-focused exchange-traded funds this year. For example, the Vanguard Information Technology ETF (VGT) started the week up a modest 4.4% year-to-date, which lagged the 7.3% gain on the SPDR S&P ETF Trust (SPY)

Why Is AAPL Stock Down in 2024?

Apple, Inc. (AAPL) stock is down in 2024 for many reasons. Here's a breakdown of some potential factors that some analysts say are contributing to the stock price decline: 

  • Missed growth expectations: While Apple maintains a massive installed user base, its product sales, particularly iPhones, were down 19% in the first three months of 2024. This has led to investor disappointment and a decline in stock price. 
  • Competition: Renewed competition from Huawei, particularly in the Chinese market, is putting pressure on Apple's smartphone dominance. Huawei's resurgence with its advanced 5G technology disrupts Apple's market share, especially in a critical country like China. 
  • Innovation shortfall: Apple is battling a rising perception among investors that Apple hasn't delivered groundbreaking innovations recently. Compared to previous years with product launches like the Apple Watch or AirPods, there is a lack of excitement surrounding newer offerings, leading to a less bullish outlook. 
  • Tech sector slowdown: The technology sector hasn't performed as well as some other sectors in 2024. This broader slowdown might be affecting AAPL stock along with other tech giants. 
  • Valuation concerns: Apple's stock price might have reached a point where some investors believe it's overvalued compared to its current growth prospects. The AAPL price-earnings ratio is approximately 26, which is not extreme, but is slightly above the 20-25 average range for growth stocks. 

Tech ETFs With Highest AAPL Stock Exposure

TickerFundExpense RatioAUMAAPL Allocation
VGTVanguard Information Technology ETF0.10%$62.6B21.5%
XLKTechnology Select Sector SPDR Fund0.09%$61.9B19.9%
FTECFidelity MSCI Information Technology Index ETF0.08%$9.2B19.6%
IXNiShares Global Tech ETF0.41%$4.2B18.1%
IYWiShares U.S. Technology ETF0.40%$15.7B15.2%

Data as of April 25, 2024. Leveraged ETFs were excluded from this list. See the full list of ETFs holding AAPL stock. 

AAPL Stock Forecast 2024

Analysts' forecasts for AAPL stock in 2024 are mixed, but generally lean toward moderate growth, as Apple remains a valuable company with a strong brand and loyal customer base. Here's a breakdown of what analysts are saying: 

  • Average price target: As of April 29, 2024, analyst consensus suggests an average price target for AAPL in the range of $200 to $207 per share, according to TipRanks. This represents a potential upside of roughly 15-20% from its most recent price of about $174. 
  • Varied opinions: While the average price target indicates potential growth, individual analyst forecasts can vary significantly. Some analysts might be more bullish, predicting higher price points, while others might be more cautious with lower targets. 
  • Focus on revenue and earnings: Analyst forecasts often consider factors like projected revenue, earnings per share (EPS), and overall company performance. Apple's recent sales figures, particularly in China, might be leading some analysts to revise their forecasts downward. 

While Apple's stock is down year-to-date in 2024, it's important to consider its long-term performance and remember that the overall stock market can be volatile in the short term as economic conditions fluctuate. 

It's always wise to conduct your own research and consider your investment goals and risk tolerance before making investment decisions.

Kent Thune is Research Lead for etf.com, focusing on educational content, thought leadership, content management and search engine optimization. Before joining etf.com, he wrote for numerous investment websites, including Seeking Alpha and Kiplinger. 

 

Kent holds a Master of Business Administration (MBA) degree and is a practicing Certified Financial Planner (CFP®) with 25 years of experience managing investments, guiding clients through some of the worst economic and market environments in U.S. history. He has also served as an adjunct professor, teaching classes for The College of Charleston and Trident Technical College on the topics of retirement planning, business finance, and entrepreneurship. 

 

Kent founded a registered investment advisory firm in 2006 and is based in Hilton Head Island, SC, where he lives with his wife and two sons. Outside of work, Kent enjoys spending time with his family, playing guitar, and working on his philosophy book, which he plans to publish in the coming year.