JP Morgan: Apple Inc. is a sector unto itself

“JP Morgan hardware analyst Mark Moskowitz this morning teams up with the folks at the firm’s portfolio strategy confab to discuss Apple (AAPL) as a ‘cyclical’ sector unto itself. Not a cyclical company, but a sector,” Tiernan Ray reports for Barron’s.

AAPL carries greater weight than most industries and several sectors. At 3.7% of the S&P 500, AAPL carries a larger weight in the index than Basic Materials, Utilities, and Telecom Services and would be the 6th largest industry (GICS Level 3). YTD, AAPL has accounted for 11 of the 104-point move in the S&P 500. In other words, as a stock, AAPL is more important than most industries and many sectors. The stock remains underowned institutionally. Of the 282 mutual funds indexed to the Russell 1000, a surprising 40% do not have AAPL as a top 10 holding – this despite the fact that AAPL is the largest stock in the Russell 1000. AAPL at current valuation is undervalued on absolute P/E (12.0x vs. 12.7x S&P 500), its relative P/E (94% vs. historical avg of 164%), or PEG ratio. By our ests, moving to historical avg adds 24- 38 points to the S&P 500 – in short, showing AAPL is important to our Cyclical call. – JP Morgan portfolio strategist Thomas Lee

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


  1. Yea baby …. After watching closely since 1991 and as a Customer who still remembers friends laughing at my “toy computer” I say …..


    1. One of my oldest friends used to call me an “Apple Weenie” back in the days of Gil Amelio, John Sculley, and Microsoft dominance. These days I just grab my crotch (ala Michael Jackson) and proclaim . . . “I’ve got your Apple weenie right here, Muldoon!”

      1. @ cromwell, if you’re old enough to remember those folks, then you’re old enough today to think twice how really ghetto that would look to most of us. To even think about mimicking anything MJ has done is really so juvenile that it beggars the mind…

        OTOH, if you could video that and post it on youTube… 🙂

  2. I can see why funds would be afraid of AAPL, because it has such a significant influence on these indexes. This works both ways up and down. It is the same argument that most investors use, don’t put a large percentage of your capital in a single stock.

    1. That’s why “most investors” missed the boat on Apple and are still missing it. I have had every penny I could get in Apple starting at $7.50 in 2003. I only wish I hadn’t stopped short of getting a second mortgage to buy Jan ’08 $150 calls in 2006. The ones I did buy turned out to be 25 baggers. Live and learn, but some never do.

  3. There is no “computers” that include “Apple’s computers..
    There is “Apple computers and “others companies computers”..
    There is no “Smartphones”, there is “iPhones” and “rest of the try to catch up phones”
    There is no “Music Players” Market, there is the “Ipod Market” and the “2% of walk mans”
    And more important, there is NO TABLET MARKET, there is the “iPad Market” and the “OMG the PC post era does exists”

  4. @disillusioned Apple hippy
    There are divisions within Apple that maintain that startup kind of mentality. It’s a fierceness that fires people to do great work, not settle, not compromise and produce ideas and products that outclass, outshine and outsell others. I expect that culture to continue.

  5. In other words, as a stock, AAPL is more important than most industries and many sectors.

    For this to be noticed by a company with its head as far up its ass as JP Morgan, it must be blindingly true.

    It’s nice to have been a ‘fanboi’ for over 20 years and have the terminally blind finally sit up and applaud. Took you long enough.

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