For years, investing in Apple stock and adopting a “buy and forget” strategy has been a common practice, with remarkable returns of 38,187% over the past two decades. However, the steadfastness of this approach is being questioned in 2024 as Apple faces unexpected challenges.
Despite a 21% rally from October to mid-December, Apple’s shares have since experienced a significant downturn, plummeting by 9% in the current year, in stark contrast to the S&P 500’s 8% gain. Several factors have contributed to this decline, including lackluster sales in China amid geopolitical tensions and a perceived absence of a clear artificial intelligence (AI) strategy.
Bruce Kamich, an analyst with over 50 years of experience, foresaw Apple’s decline and advised investors in January to steer clear of long positions in the stock. His recent analysis reaffirms this stance, citing technical indicators such as the double top pattern, weakening on-balance volume, and a bearish MACD oscillator signal.
The iPhone, once Apple’s flagship product, has faced increasing competition and market saturation, making it challenging for the company to achieve significant year-over-year growth. Additionally, geopolitical tensions between the U.S. and China, coupled with uncertainty surrounding Apple’s AI initiatives, have further dampened investor sentiment.
While other tech giants like Microsoft, Alphabet, and Meta have embraced AI and integrated it into their products and services, Apple’s AI strategy remains largely undisclosed. Speculation suggests potential partnerships with Google and Baidu for access to AI models, but nothing has been confirmed.
Kamich’s analysis, including point-and-figure chart targets, indicates a bearish outlook for Apple’s stock price. He advises caution and suggests that investors wait for more clarity on Apple’s AI plans and improvements in investor sentiment before considering significant investments in the company.
In summary, while Apple’s historic performance may have favored a “buy and forget” approach in the past, current challenges and uncertainties warrant a more cautious investment strategy moving forward.