Should I buy Apple shares for my ISA in February?

While Apple is undoubtedly a company of the highest quality, this writer has some reservations about buying its shares for his ISA portfolio right now.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Smiling white woman holding iPhone with Airpods in ear

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Apple (NASDAQ: AAPL) stock has marched 71% higher in a little over over two years, giving the iPhone maker a mammoth $3.35trn market cap. With the US bull market in full swing, it seems just a matter of time before it becomes a $4trn business. So, should I add Apple to my Stock and Shares ISA? Let’s dig in.

Created with Highcharts 11.4.3Apple PriceZoom1M3M6MYTD1Y5Y10YALL27 Jan 202027 Jan 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '2520212021202220222023202320242024www.fool.co.uk

A bruised Apple in China

Weighing up the investment case, I have a few concerns. The first is that the iPhone is rapidly losing traction in China, its biggest market outside the US. According to data from Counterpoint Research, sales there were down 18.2% in the December quarter.

Now, we know that China’s economy is struggling and consumer spending is weak. So falling sales aren’t too much of a surprise. However, the report says that China’s Huawei was the number one smartphone seller last year, pushing Apple down to third place. 

Should you invest £1,000 in Greggs Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Greggs Plc made the list?

See the 6 stocks

Why might that be? Well, beyond generally charging higher prices, the US firm has been late to the party when it comes to rolling out artificial intelligence (AI) features in China. It’s still in talks with Tencent, Baidu, and TikTok owner ByteDance about integrating their AI models — already approved by regulators — into iPhones.

But Apple will need to get its skates on. Consumers in the world’s second-largest economy are unlikely to opt for one of its new phones when domestic rivals are already offering the latest AI-powered features.

In the West, there’s also evidence that consumers haven’t been wowed by its recent ChatGPT-powered offerings. Therefore, the massive AI-driven smartphone upgrade cycle that many analysts were predicting hasn’t started yet.

Meanwhile, some continue to question Apple’s record on product innovation.

[Apple hasn’t] invented anything great in a while. It’s like Steve Jobs invented the iPhone, and now they’re just kind of sitting on it 20 years later.”

Meta Platforms CEO Mark Zuckerberg on the Joe Rogan podcast, January 2025.

High valuation

Another concern I have is slowing revenue growth. Again, this is hardly surprising given Apple’s colossal size. But in its fiscal 2024 period, which ended in September, revenue only grew 2% year on year.

And while adjusted earnings rose faster, the firm’s growth is still noticeably slower than Big Tech peers like Amazon, Microsoft, and Google parent Alphabet.

Yet Apple stock is trading for a high price-to-earnings (P/E) multiple of 33. That valuation doesn’t strike me as attractive.

The world’s best investors are jumping ship

The final worry I have here is that top investors have been selling the stock. The highest-profile of these is Warren Buffett, who has cut his gigantic Apple stake by around two-thirds over the past year.

Other notable sellers lately include billionaire fund managers Steven Cohen, Israel Englander, and Terry Smith. Slowing growth and a high valuation could be factors that influenced their decisions.

My move

Of course, it goes without saying that this is a wonderful company. There are around 2.2bn active Apple devices worldwide, and its services division that houses the App store, iCloud, Apple Music, Apple Pay, and more is growing double digits.

Personally, I can’t ever imagine switching from an iPhone, while I’m also now an Apple Music subscriber. However, despite being a very satisfied long-term customer, I’m not interested in investing in the shares right now.

Investing in AI: 3 Stocks with Huge Potential!

🤖 Are you fascinated by the potential of AI? 🤖

Imagine investing in cutting-edge technology just once, then watching as it evolves and grows, transforming industries and potentially even yielding substantial returns.

If the idea of being part of the AI revolution excites you, along with the prospect of significant potential gains on your initial investment…

Then you won't want to miss this special report inside Motley Fool Share Advisor – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And today, we're giving you exclusive access to ONE of these top AI stock picks, absolutely free!

Get your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

2 FTSE 100 and FTSE 250 stocks to consider as stock markets plummet!

Looking for lifeboats as growth-crushing trade tariffs loom? Here are two (including a FTSE 100 gold stock) I think merit…

Read more »

Number three written on white chat bubble on blue background
Investing Articles

Just released: the 3 best growth-focused stocks to consider buying in April [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Happy young plus size woman sitting at kitchen table and watching tv series on tablet computer
Investing Articles

£10,000 invested in Watches of Switzerland shares 1 year ago is now worth…

Watches of Switzerland shares have been decimated by Trump’s tariffs on Switzerland. Dr James Fox explores whether this is an…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

Growth stocks are crashing! Here’s what I’m doing now

Our writer shares his thoughts as growth stocks get crushed, as well as a favourite from the Nasdaq that he…

Read more »

Investing Articles

What’s going on with the Nvidia share price now?

The Nvidia share price is tanking. Once the most valuable listed company, Nvidia has seen more than $1trn wiped off…

Read more »

Investing Articles

This FTSE AIM stock has £2.3bn in net cash, and a market cap of £2.4bn!

I love this FTSE AIM stock, but it really hasn’t delivered for me yet. The stock trades with crazily low…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

Down 15% in a week! Are these 5 FTSE 100 fallers screaming buys as markets plunge?

Five of Harvey Jones's favourite FTSE 100 stocks all have the same thing in common – they've fallen around 15%…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

2 stocks that have been crushed and now offer a ton of value

Edward Sheldon has been scanning the market for stocks that offer value after the sell-off. Here are two shares he…

Read more »