Is Apple Stock a Buy After Popping on Porsche Partnership Rumors?
Posted On March 25, 2022
Apple (NASDAQ:AAPL) shares popped 2% on Friday, continuing a week where shares rallied. In all, AAPL stock was up nearly 7% last week. Part of the reason for this pop was that markets in general performed better last week, encouraged by events like talks between President Biden and Chinese leader Xi Jinping. However, Apple also got a boost at the end of the week on news that the company had been in talks with auto maker Porsche about possible joint projects.
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Despite its impressive run AAPL stock remains down nearly 10% in 2022. With Apple shares on the move, is it time to stop waiting for them to slip further and make a purchase?
What Are Apple and Porsche Up to?
Apple’s auto inspirations go far beyond its CarPlay feature that integrates an iPhone with a vehicle’s entertainment system. The “Apple car” is often referred to as the company’s worst-kept secret. Whether the Apple car is an electric vehicle, an autonomous car, an automotive platform or some combination of the three has been the subject of constant speculation. At the moment, the best guess is that Apple is developing an EV. To produce it, the company needs an experienced auto manufacturer.
Last Friday, Porsche’s CEO said that company managers had met with Apple last year to discuss possible joint ventures. He went even further, saying: “We already have Apple CarPlay, we will expand on that.” Porsche may be a niche brand, but it is a leading EV maker. In 2021, the Porsche Taycan was the world’s eighth best-selling EV, despite an $81,000 base price. News that Porsche and Apple have been talking was enough to raise hopes that Apple is at the stage where it is actively looking for an experienced EV maker to partner with.
Given the incredible impact the iPhone has had on AAPL stock since its launch in 2007, there are high hopes that an Apple car will be the next big growth driver.
There Are Plenty of Other Reasons to Like AAPL Stock
AAPL stock is attractive looking, even after last week’s rally raised its price. It’s a proven performer, as everyone knows. After all, this is a company working toward a $3 trillion market cap.
However, as I’ve noted several times already in 2022, this is showing all signs of being a record year for Apple in terms of new product releases. We’ve already seen the first proof of this, with a March special event that introduced the iPhone SE 3 with 5G, the first all-new Mac model in years and the killer M1 Ultra processor. The iPhone SE 3 in particular — with its combination of 5G, an A15 Bionic processor and an affordable $429 price tag — could really move the needle for AAPL stock.
And this was just the first Apple event of the year.
Keep an Eye on Supply Chain and Economic Factors
There are a lot of positives for Apple in 2022. Ordinarily, I would say that this positions AAPL stock for another growth run like 2020 or 2021. However it’s important to note the fact that 2022 hasn’t played out the same way, especially for big tech stocks like AAPL.
There are a number of issues that have combined to play spoiler so far in 2022. They could continue to add volatility to Apple stock in the short term. Russia’s invasion of Ukraine has resulted in market turmoil. Investors are worried about spiking inflation and rising interest rates, and their potential impact on consumer spending. In addition, companies like Apple that are reliant on China continue to experience significant supply chain disruption.
In the long term, Apple stock growth shouldn’t be derailed by these factors. However, they have combined to push AAPL down nearly 10% in 2022.
Bottom Line on Apple
Regardless of what — if anything — comes out of Apple’s discussions with Porsche, the overall long-term growth prospects for AAPL stock appear pretty solid. Between new iPhones, the continued success of the company’s M1 chips and best-seller accessories like AirPods, Apple has momentum that’s unlikely to let up.
News about a potential partnership with Porsche are just about what could be one of the next huge growth drivers for the company.
Overall, this Portfolio Grader “B” rated stock is a safe pick for a growth portfolio. Just be aware that issues like inflation, the war in Ukraine and ongoing supply chain challenges have the potential to play spoiler and could continue to cause AAPL stock volatility through 2022.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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