There is no denying it an apple(NASDAQ: AAPL) it was one of the most profitable stock markets of the modern era. A $10,000 investment in this legendary tech giant 20 years ago would be worth nearly $2.5 million today. Take out the iPhone's invention, in particular.
The argument that Apple's peak growth days have passed, however, makes sense. Neither the iPhone's revenue nor the popular smartphone unit's sales are growing, and they alone still account for nearly half of the company's top and bottom lines. Although its services arm is respectable, it is not just the driver of growth that the iPhone was several years ago.
Maybe investors it can be find better opportunities than this.
Before putting Apple back on the shelf for eventual oblivion, though, you might want to take a closer look at the company's foreseeable future. The tech giant still has a few tricks up its sleeve that could help turn shareholders into millionaires.
Don't misread the message. It is unlikely that Apple stock will be able to catch another wave like the one that started in 2007 when the first iPhone was introduced. The iPhone was a once-in-a-generation product that could never be replaced as a profit center.
Even a halving of Apple's stock returns over the past 20 years over the next 20 years, however, would still make it a better performer than any other ticker could be at that time. The necessary growth mechanisms are certainly there.
One of them, of course, is the advent of artificial intelligence.
While Apple was late to the AI party, it made up for lost time with what is arguably a better, more user-friendly solution. Its so-called Apple Intelligence puts powerful productivity AI tools like summarizing emails, writing tools, and cleaning up photos into users' hands, in addition to turning Siri into a full-fledged digital assistant. In addition, this difficult digital work is handled by the device itself instead of placing these tasks in the cloud and sending the information back to the iPhone or iPad being used. This will make it faster to use AI. It could also make it better, finally sparking investor interest in such technologies that have so far been ho-hum.
And this was necessary the will they finally happened again… at least according to technology market research firm IDC. It predicts that sales of AI-enabled smartphones will reach 234 million units this year, but explode to 912 million such devices by 2028. Consumers simply need more time to see the value of these AI tools.
It's not just the consumer side of the artificial intelligence revolution that could power Apple stock for the foreseeable future, though. The company is also getting deeper into the business of making shacks.
Years ago, Apple was content to use readily available semiconductors in its hardware such as Macs, then the iPhone, then its iPad. As time went on, however, it was able to request more customization of its silicon, most of which was supported Arm Holdings' ARM processor architecture. Now — with the obvious benefit of doing so — the company primarily designs its own chips and hires third-party manufacturers to make them to specifications.
However, that is not the most curious part of evolution. Of particular note is how the company intends to use these semiconductors. While certainly some of this basic R&D is found in its latest iPhones and iPads, it has been noted that Apple is actually designing processors to be used in AI data centers, setting the stage for entering waters it doesn't seem all that interested in going deeper. in the middle.
Apple itself has said little on the matter, so take the suggestion with a grain of salt. Of course, the company wouldn't say much, even if it was planning to become a major AI data center player. It will only confirm when it is ready for full launch.
This much can be said for sure though: If Apple wanted to dive into the artificial intelligence data center industry, it has the technical know-how to make a big splash. Or, it could do something close to the business that might appear to be for sale, with little competition.
Whatever opportunity may arise, at stake is a piece of the data center AI market that research firm Lucintel says will grow at a rate of 22.5% between now and 2030.
Also, there will never be another iPhone, so there will never be another wave of revenue and earnings growth like the one that sparked Apple. As the old saying goes, lightning never strikes the same place twice.
There is limited opportunity ahead for current and prospective Apple shareholders. It's just different than what made this stock so high in the recent (not recent) past. Apple has changed, and rightly so. Indeed, in an environment where too many companies are unwilling or unable to evolve, the fact that Apple can — and does — strengthens the argument that it can help you reach the seven-figure savings mark.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Apple. The Motley Fool has a policy of disclosure.
Can Apple Stock Help You Retire a Millionaire? was first published by The Motley Fool
