Apple shares hit new records this week – almost surpassing France’s stock market value. Still, we see reason for the Big Tech name to rise even higher in 2024. The iPhone maker closed Thursday at an all-time high of more than $198 a share and inched closer to a $3.1 trillion market cap. (Shares took a modest reprieve on Friday). To put this into context, Apple is almost as big as Europe’s largest stock exchange. The CAC All Share index, which measures the largest 373 stocks in France, had a market cap of $3.38 trillion as of Thursday’s close. But, despite Apple’s stellar performance with a more than 50% year-to-date gain, we see four tailwinds for our “own it, don’t trade it” stock in 2024. Services: We are encouraged by the management’s comments regarding the speed of services. We believe this remains the biggest long-term driver of mega-cap name growth. Apple’s Services business, which provides the high-margin recurring revenue stream that Wall Street loves, hit a record high of $23.31 in revenue in the latest quarter, up 16% year-over-year. India: Apple’s expansion into emerging markets like India would be a solid way to diversify its supply chain amid uncertain relations between the US and China. CEO Tim Cook previously told CNBC that India was a “huge opportunity” for the world’s most valuable publicly traded company. The move could help Apple’s iPhone tap into the country’s untapped economic potential. As we’ve said many times before, Apple’s product quality, closed ecosystem, and pricing continue to attract and retain its loyal customer base. We hope it does the same in India too. Artificial Intelligence: We see Apple’s AI efforts as a great way to add value to its devices and overall customer experience in the long run. According to Bloomberg, the company is on track to spend $1 billion every year on building its generative AI products. Apple isn’t launching a chatbot like ChatGPT, but is instead said to be using AI to improve offerings like Siri, Messages, and Apple Music. Mixed reality: Apple’s highly anticipated Vision Pro headset is scheduled to be released in early 2024, which Jim Cramer described as an “amazing device” while testing it in July. Citing a great user experience, he said at the time, “Once it’s on I can’t imagine taking it off.” The launch of expensive mixed reality headsets (starting at $3,499) will not have any impact on the financial situation in the near term. But, we will see what developers are saying about it and how the new ecosystem emerges around it. As the form factor improves we can make the Vision Pro a significant revenue driver over time. AAPL YTD Mountain Apple (AAPL) shares year-to-date performance Overall, Wall Street is also bullish on Apple for next year. Citigroup wrote in a recent note that a “bearish stance on the stock is missing the story of structural gross margin expansion” for Apple, reiterating the uptick in services sales. “We expect the above trends to continue next year, and see the adoption of AI, phones, and Vision Pro as potential upside catalysts.” The company’s analysts have a $230 price target for the stock, about 16% above Friday’s trading level. (Our club price target is $205.) However, we don’t want to overlook some potential headwinds either. Competition in China, Apple’s second-largest market, has become increasingly fierce as domestic smartphone players like Huawei and smaller domestic brands have gained market share there. Cautious consumers could also be an issue as the US – Apple’s biggest market – faces recession concerns. (We still believe the Federal Reserve can manage a soft landing.) The Bottom Line Although both China competition and soft U.S. spending could hurt Apple’s sales, we believe any weakness This will be offset by growth in services and new product launches. Capital return programs such as large-scale stock buybacks are also beneficial to shareholders. Jim has maintained his conviction despite the typical hate-Apple-trade headlines. In September, the tech giant posted mixed quarterly results, prompting a brief — yet unwarranted — selloff. While some Wall Street analysts speculated whether Apple’s best days were behind it, Jim said investing in the firm’s stock “isn’t about the quarter” – but instead, about the long-term track record of stock performance. Is in. (Jim Cramer’s Charitable Trust is long AAPL. See here for a full list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling stocks in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. The above Investment Club information is subject to our disclaimer as well as our terms and conditions and privacy policy. No fiduciary obligation or duty exists, or is created, by virtue of your receipt of any information provided in connection with the Investment Club. No specific results or benefits are guaranteed.

Apple Inc. Chief Executive Officer Tim Cook holds an iPhone 15 Pro Max during an event at the Apple Park campus in Cupertino, California, US, on Tuesday, September 12, 2023.

David Paul Morris | Bloomberg | getty images

Apple shares hit new records this week – almost surpassing France’s stock market value. Still, we see reason for the Big Tech name to rise even higher in 2024.

Source: www.cnbc.com