Could Apple be the Recession-Proof Stock Investors Are Seeking?


With inflation rising and recession fears increasing, investors are looking for stocks that can resist downward market pressure.

Many are turning to “blue-chip stocks” like Apple Inc. (NASDAQ:AAPL) with a strong foundation that could allow them to withstand dire economic conditions better.

But is Apple Inc. (NASDAQ:AAPL) really a good choice for investors? Let’s take a closer look.

Apple Stock Rises as Inflation Continues to Soar

Apple Stock increased in price from a low of $142.90 to a high of $146.40 during trading on Wednesday (July 13).

The company’s gains came at a time when inflation worries were also increasing.

CNBC news reported Wednesday (July 13) that inflation rose a whopping 9.1% in June – that’s more than most experts predicted. That CNBC report also included some other eye-catching details:

    • The core Consumer Price Index (CPI) rose 5.9% when excluding food and energy
    • Costs are surging across sectors and especially in areas like dental care, rent, groceries, and gasoline
    • When adjusted for inflation, the wages of hourly workers fell 1% in June and are now 3.6% lower than they were a year ago 

It’s in this economic climate that investors are looking for stable stocks. So should they target Apple Inc. (NASDAQ:AAPL)?

Analysts High on Apple Stock

According to an article on Seeking Alpha that does a deep-dive into the stock, most analysts say that Apple should be considered a strong buy.

For instance, 22 out of 28 Wall Street analysts currently rate the stock a buy, while the other six have it as a hold. None of the analysts have it rated as a sell at this time.

Those same analysts have set price targets for the stock ranging up to $210 with an average target price of approximately $185, which would be a nearly 25% gain from current prices.

Apple Inc. (NASDAQ:AAPL) was at $144.06 in early trading on Thursday, July 14.

Why Are Analysts Bullish on Apple Stock?

There are a few reasons, actually.

For one, Apple has experienced a rise in demand for its premium devices, such as the iPhone.

In fact, Reuters reported on Wednesday (July 13) that sales of Apple’s iPhone remained robust in early July even as there was a significant decline in sales overall in the smartphone market.

Add this continued demand with optimistic analysts’ estimates for revenue and earnings, and it becomes clearer why so many are high on Apple going forward.

Apple is also enjoying solid financial performances across its business segments right now. For example, wearables and services are both reporting strong growth.

Plus, Bank of America just reported that the company’s advertising services could be worth as much as $20 billion within four years.

BOA analyst Wamsi Mohan estimated that currently $5.3 billion in revenue is created by the company’s App Store ads alone. He then said the revenue could grow to $9.8 billion by 2024.

He added that revenue from Apple Maps and an ad-supported version of Apple TV+ could add another $10 to $12 billion to the company’s ad revenue by 2026.

Is There Any Bad News Concerning Apple Stock?

As with most companies in today’s challenging economic conditions, not all news concerning Apple Inc. (NASDAQ:AAPL) is positive. 

For one thing, while experts expect the company to expand its advertising focus, the company itself has announced no such plans.

For another thing, market insiders wonder if Apple Inc. (NASDAQ:AAPL) can maintain recent gains across such sectors as iPhone, Mac, iPad, and Wearables if a recession does occur and consumers see their discretionary budgets severely limited.

The bottom line is this is a very volatile time for investors, and they will need to do extensive research on even big companies like Apple Inc. (NASDAQ:AAPL) before making an investment decision.

Featured Image: Megapixl @ Fotofreaks

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About the author: A professional financial news writer with extensive experience writing a variety of content, including: informational articles on a wide range of subjects, and sales and marketing content that includes landing pages, sales letters, web pages, emails, press releases and more. I have also ghost-written numerous books. I started my career as a newspaper reporter and editor.