Howard Gold: Apple shares will never see $700 again

“Last September was a great time to be an Apple Inc. shareholder. The stock topped $700, capping a remarkable run in which the shares practically doubled since July 2011,” Howard Gold writes for MarketWatch. “It’s been downhill ever since. From its closing peak of $702.10, Apple shares plunged by 37.4% as of last Friday, when it closed at $439.88. The stock has bounced back a bit, but when the world’s most valuable company loses that much in just four months, something must be seriously wrong.”

“It is. Apple’s competitive position has seriously weakened, and investors are recalibrating their outlooks. Tailwinds have turned into headwinds as tangible and intangible issues alike weigh heavily on the shares,” Gold writes. “Apple has lost the mantle of the greatest growth stock of our era; it may no longer be a growth stock at all.”

Here are four reasons why I don’t think Apple’s stock will see $700 again:
1. Growth in phones is slowing as competition increases
2. Margins are shrinking
3. Apple is losing its innovative edge
4. Apple may no longer be a growth story

Gold writes, “CEO Cook may be quietly repositioning Apple as a solid blue-chip stock. That would be a big blow both to Apple’s image and to the cultists who worship the company. A dividend-paying Apple that buys back its stock like, say, IBM IBM +0.99% might be a fine long-term investment, but it wouldn’t be worth $700 a share.”

Read more in the full article here.

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57 Comments

  1. Sorry, but the guy is right.
    Blue chip stock. It’s kind of what the “worlds most valuable company” should be.
    They can still innovate, hell have the ever been in a better position to do it? But the scrappy do-or-die-trying days are behind.

  2. So AAPL becomes like IBM? IBM has doubled over the last 4 years by being a solid blue chip company. That would put AAPL at $900 in a few years time. Even if you took out the drop in 2008 it’s still up handsomely from its previous peak. Doesn’t seem so bad. Much less volatility too.

    What a fucking idiot

  3. When Howie turns out to be wrong does he quit or get fired or just join the ranks of anal-yst-dom(?). Or perhaps he can just switch to predicting weather or the next apocolypse?

  4. This is exactly what Apple needs. To be the underdog. It’s times like these that the company has thrived the best and seemingly come back from the dead. The problem is that some of us Apple lovers have become spoiled. We have seen Apple get to the top. But sometimes you have to be knocked around to find something that motivates the core of who you are. When Steve passed away, I think they’ve lost that desire. I am ever hopeful and optimistic that things will get better. Hopefully Jonny, who in my opinion has the closest thing to Steve’s vision, can shake things up and change the way we experience our products.

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