Apple is one of those stocks that you don’t trade, rather you own them. In his latest letter to shareholders, legendary investor, Warren Buffett described Apple as a “family jewel”. The erstwhile phone maker has morphed into a tech colossus with tentacles everywhere — from smartphones and movie/music streaming to electric cars. So, how do you buy Apple sticks? This article is a guide to how you can buy and own apple stocks.
Table of Contents
Learn How to Buy Apple Stocks in 3 Easy Steps
Find a broker
Apple stock can’t be purchased directly which implies that you would need to go through a broker (offline and online). Though it is easy to assume that just about any brokerage firm offers apple shares for sale, you can always do a background check to see if they have access to the exchange. Always use a broker that is regulated by FINRA.
Analyze the Apple stock price chart
Apple has proven to be a financially sound company, but you can still do your fundamental analysis. However, what is more important is to check the stock price chart to determine a good entry point. Having shed 5.7% of its value since this year, the stock may be trading at a value. By using technical indicators and trend lines, you can establish support and resistance levels and determine a feasible entry and exit point.
After doing your analysis and identifying the right entry level, you can place your buy orders. Apple shares are traded during opening hours of the stock market, including in the pre and post markets.
Apple company overview
Apple Inc. is an American multinational technology company headquartered in California, United States. The company designs, manufactures, and sells smartphones, tablets, personal computers, software, and other Apple-branded accessories such as the iPhone, Mac, and iPad.
Apple is the most valued company in the United States currently worth $2.1trn and was the first company to surpass the $1trn mark which it doubled in two years.
The company is the fourth-largest PC vendor and smartphone manufacturer in the world by unit sales.
Apple has high brand loyalty with 1.65 billion active devices globally, making it the world's most valuable brand. The company is currently researching electric cars and autonomous driving as it hopes to build its own electric vehicle. Though Apple is yet to comment publicly on its electric car project codenamed Titan; given the company’s antecedents, exploring opportunities in electric vehicles is the only logical step for Apple to make.
Apple business model and revenue streams
Apple's astronomic growth in revenue and income were originally driven by strong sales of its iPhone products. The iPhone segment is the company's largest accounting for almost a quarter of the company's revenue. Apple generated $26.44bn in revenue from iPhone sales in Q4 of the 2020 financial year.
However, in recent times, Apple's services segment has been a major revenue driver and is currently the fastest-growing segment of the company. The growth in the services segment is a ripple effect of the company's investment in research and development. Apple spent a whopping $18.75bn on R&D in the 2020 fiscal year, an increment of about $2.5 billion from the previous year.
The service segment currently accounts for about 17% of Apple's revenue, putting it ahead of Mac, iPad, and Home accessories segments. In Q4 2020, the service segment generated a total of $14.55bn, accounting for 13% of the total revenue generated in that quarter. These services include iTunes, AppleCare, Apple Pay, amongst others.
Overall, Apple’s services segment has shown strong growth over the last few years, trailing the company's largest segment, the iPhone. The service segment is currently valued more than its hardware business.
By focusing on the service segment, Apple has been able to grow from a phone marker to one of the world's leading providers of digital services.
History of Apple
Contrary to its fame as a reputable global phone maker, Apple originally started as a hardware company. On April 1, 1976, Steve Jobs, Steve Wozniak, and Ronald Wayne founded the Apple Computer Company. There are two seemingly conflicting accounts on how they settled for the name Apple.
According to Steve Jobs, the company's name was inspired by his visit to an apple farm while on a fruitarian diet. Jobs thought the name "Apple'' was "fun, spirited, and not intimidating". However, in his autobiography, Steve Wozniak stated that they chose Apple because they could not come up with a better “technical-sounding" name.
To finance the creation of the company's first product, Apple I - a computer which Wozniak designed and hand-built- Jobs sold his car, a VW Microbus, for a few hundred dollars, while Wozniak sold his HP-65 calculator for US$500.
Apple I went on sale for US$666.66 which made Wozniak allude to the fact that he came up with the price because he liked "repeating digits", stating that he was unaware of the coincidental mark of the beast in the number 666.
Apple Computer, Inc. was incorporated on January 3, 1977, without Wayne who sold his 10% stake in the company back to Jobs and Wozniak for $800 only twelve days after having co-founded Apple.
During the first five years of operations, revenues grew exponentially, doubling about every four months. Between September 1977 and September 1980, yearly sales grew from $775,000 to $118 million, an average annual growth rate of 533%.
On December 12, 1980, Apple under the ticker symbol "AAPL" went public in a blockbuster IPO which generated over $100 million, more capital than any IPO since Ford Motor Company went public in 1956. By the end of the day, Apple's market cap was over a billion.
In 2001, Apple debuted the iPod portable digital audio player, and in 2003, the iTunes Store was launched and became the world's largest music retailer two years later. In 2007, Steve Jobs announced the change of the company's name from Apple Computer, Inc. to "Apple Inc.", at the Macworld Expo. This announcement signified a shift in the company's business model from computers to consumer electronics which was crowned by the release of the iPhone and the launch of Apple TV. About 270,000 iPhones were sold in the first 30 hours of sales symbolizing a game-changer for the mobile phone industry. Since then, Apple has expanded to other areas such as electric vehicles, chip making, artificial intelligence, autonomous driving amongst other things.
Brokers that offer Apple shares
Shares of Apple are listed on most brokerages and online trading platforms. We have compiled a list of the best brokers offering Apple shares using certain factors, such as trading cost, security, research tools, and user experience.
Should I invest in Apple stock?
Yes. Apple is a very good stock to invest in. It is one of those stocks that you don't just trade but also needs to buy and hold for the long term.
Apple stock investment potential
Apple has opportunities for growth in many areas, which make the stock a good one to own. Though the iPhone business seems to be slowing, the ability of the company to position itself as a digital services firm shows adaptability to changing trends.
Apple's services and wearables segments continue to grow and have opened up multiple income streams for the company in the long term. The company also has ambitious projects in electric vehicles, autonomous driving, and artificial intelligence. The company also has a long track record of profitability. Considering all these factors, Apple has good long-term investment potential.
What kinds of investors should include Apple stock in their portfolios?
A stock like Apple with significant long-term potential appeals to many types of investors. Those seeking a blend of value and growth can readily find such in Apple. In fact, Apple has had to undergo a share split twice to make its stock more affordable to investors because of its rising share price. Due to the company's outlook and the growing diversification of its core business model, Apple stock appeals more to long-term investors rather than swing or day traders.
How much should I invest in Apple?
The amount one can invest in Apple is relative. This depends on financial standing, portfolio size, and even knowledge of stock investment. However, the general rule of thumb is to invest only what you can afford to lose.
How to buy shares in Apple stock?
Step 1: Figure out how much you’d like to invest in Apple
The first step is deciding how much you are willing to invest in the stock. Do you want to buy whole shares or fractional shares? Do you have a specific number of units you would purchase or a predefined amount? Be sure to invest only what you can afford to lose. Check the current price and choose an amount or number of units appropriate for you.
Step 2: Choose the right broker for you
If you’re new to trading, you would have to open a brokerage account. Opening an account is pretty simple; just make sure you pick the right account based on your budget and trading objectives.
Step 3: Place your trade
You can trade Apple using “market” or “limit” order. A market order is a request to buy as soon as possible at the best price and a limit order is a request to buy at a specific price only, or better. Always have a well-detailed trading strategy before executing a trade.
Buy Apple shares using a broker
The most popular and convenient way to buy Apple shares is through a broker. Brokerage companies and online trading platforms offer shares of Apple. However, you must first own a brokerage account before you're allowed to purchase Apple stocks. Opening a brokerage account varies among brokers. While some do not require a minimum deposit, others require potential customers to maintain a minimum amount in their brokerage account. The procedure for opening a brokerage account is somewhat uniform among brokers. A legal declaration of age, contact details, and a valid form of identity are usually required by all brokers.
Buy Apple shares with a direct stock purchase plan (DSPP)
Direct Stock Purchase Plan (DSPP) is a way for individuals to buy stocks directly from a company rather than through a brokerage. Apple does not have DSPP for investors. The closest it has is its employee Stock Purchase Plan, which allows employees to acquire Apple shares for 85% of its fair market value.
Frequently Asked Questions
Apple is a very good stock to buy because it has good fundamentals and is currently trading at a value.
Apple is one of the most profitable companies in the United States due to surging demand for the iPhone, and the growth of its services and wearable segments. The company made a profit of $57.4bn from a revenue of $274.5bn in the 2020 fiscal year.
Yes, you can make money trading Apple.
Each trading platform appeals to a subset of investors/traders. As such, the "best" platform depends on the investment/trading preferences of the investor/trader.
Apple stocks can be traded when the stock market is open between 9.30 am and 4.pm New York time. They can also be traded pre and after-market hours.
Apple is listed on the Nasdaq.