AAPL is a core long-term hold due to strong fundamentals and index flows, despite high valuation (36x fwd P/E); expected to perform well with near-term price targets of $360-$380.

It's time to delve into the affairs of Apple. Apple is at the heart of our technology today, and I'm now joined by Lance Roberts, chief investment strategist at RIA Advisors . Glad to see you.

So, it's been a month since John Ternos took over at Apple. What did we see in the performance of the new CEO?

Well, things are good so far, but as I said , it's only been a month. We haven't gone through a profit cycle yet . That will happen later this month, in the next two weeks in fact.

Therefore, it will be very important for Wall Street to see how he handles earnings announcements, conference calls, and the like . But yes, things are good so far.

I mean, it was also seen as representing the next level of artificial intelligence. Do we now see Apple in a different light than we did a month ago? Has the AI company become more of a company than it was a month ago?

not yet. It will take some time. They are far behind in terms of implementing artificial intelligence. So, as you know, it's coming. I'm not saying it won't happen, but they haven't incorporated much of it yet.

I think this will be one of the big challenges ahead of him, which is simply making up for the delay in the artificial intelligence aspect. But look, Apple is famous for this , isn't it?

You know that Samsung had a foldable phone 7 years ago, right?

And now Apple is releasing the "iPhone Duo". What they really excel at is seeing what works in the market, letting others discover it, and then coming along to make a better version.

That's why we own Apple shares. We have owned it for a long time. They have a large cultural base surrounding them. Therefore, I wouldn't place too much emphasis on the fact that they are a little behind the curve in artificial intelligence.

This is their usual method of product development.

In 10 days, you can already pre-order this phone , right? Pre-orders start on October 16, and shipping starts on October 23. What did we see at the price point? Does its price of $1199 seem reasonable?

Okay, that's the starting price, isn't it? So , this is for the 256GB model . There is a significant price gap between these two phones, and I think that's interesting, as these phones are primarily financed through communication plans.

Consumers do not pay two thousand dollars of their own money to buy a phone. Instead, they replace their current phones and increase the value of their subscription to their current phone plan.

I think this is something worth monitoring, especially given the weak wage growth we are currently experiencing. We have begun to notice a contraction in personal savings rates.

Current projections indicate shipments of 6 million units this year and 15 million units next year. This equates to approximately $30 billion in revenue.

Therefore, this is not a simple consumer test. I believe these figures are accurate. I think we will reach those numbers, but it will be interesting to see how quickly this product is adopted in the current consumer situation.

Your comments here began by indicating your general optimism about this stock. What is driving this optimism? Well, there are several reasons . First, as I mentioned earlier, we have owned Apple shares for a very long time.

There are two reasons why we own Apple shares. The first reason is simply its weight within the index. We have huge negative flows entering the index every month. People contribute to 401k retirement plans.

They regularly buy exchange-traded funds (ETFs). Apple is present in approximately 450 different exchange-traded funds (ETFs). So, every time someone buys a box, they are buying Apple stock.

Therefore, part of the reason we own Apple, aside from the fundamentals, is simply to take advantage of the negative flows that enter the stock.

Secondly, and this is still very important, the company's fundamentals are good. It's expensive. This is a company that trades at a forward price-to-earnings ratio of 36x and an actual price-to-earnings ratio of 38x.

It has a price-to-earnings growth (PEG) ratio of slightly over three. But profit growth is proceeding at a rate of approximately 20%. Therefore, as long as they are able to achieve their targets, the stock should perform well.

I don't think there's huge upside potential in this company. It is a very mature company.

But if this company is part of your investment portfolio, it does not significantly affect you, even during periods of market downturn. The year 2022 was a good example of that.

We have seen many large companies with huge market capitalization hold up much better than many of the more speculative names in the market. Therefore, from a portfolio allocation perspective , this is a core investment for us, and it is likely to remain so until we see an environment where earnings and fundamentals actually begin to deteriorate for whatever reason.

We were talking about the costs of memory chips and things like that . This is something that deserves attention, isn't it? We heard Tim Cook talking about raising prices before he left, because, you know, he kind of delivered bad news before he left, did n't he?

John Ternos did not do that. Things will become slightly more expensive due to the cost of memory prices. He said that everything has to be perfect for Apple to continue rising because it is expensive, due to the valuation he mentioned, 36 times the profits.

345 was the last high level. It's not too far from that. The current price is 332. Do you have price targets, or do you expect it to at least surpass that high level ? I mean, that's not far off.

Well, no. I think this high level is fairly reasonable. And again, if you look at the current market situation. We are heading into the final quarter of the year. We are about to enter the earnings season.

You have share buybacks that will come back again. We went through a period of no-holds-barred share buybacks last month. She is on her way back. We have somewhat negative feelings across the board regarding the state of financial centers.

Therefore, there are many factors that support better market performance as we approach the end of this year. If this breakout continues towards new record highs in the market today, Apple will be pushed higher along with this market.

Therefore, that previous record level for "Apple" is a very reasonable target . However, Wall Street's targets are currently between 360 and 380. This does not represent a significant uptrend to reach those targets.

And I think, going back to your point about memory chips, that will be the only thing we really need to monitor, and that is those input costs. If memory prices do not begin to stabilize and perhaps decrease slightly, and if they continue to rise at the current rate and this shortage remains a bigger problem in the future, it will begin to affect the profits of companies that rely on these chips.

It will be more difficult for companies like Apple, Microsoft, and others who rely on those chips for their data centers. I had a friend here who worked in the stock market for many years, and he always said: Never short Apple stock in the fourth quarter, because everyone wants something from Apple for the holidays.

What do you think of that? I mean, it's certainly not a sound trading technique, but do you think there's any logic to this madness?

Yes, of course. I mean, there are a few stocks you buy before Christmas every year. Apple is one of them. If we manage to get through the midterm elections, and the Republicans retain control of part of Congress, while the Democrats hold another part of the Senate, we may reach a state of political gridlock.

This usually paves the way for some of the best returns in the markets in the future. Typically, when there is a split between the two boards, the S&P index returns range between 13% and 17 % annually.

Therefore, this is truly the best possible outcome . However, as I said earlier, if the markets are rising, the top 10 stocks in the index contribute about 40 cents of every dollar. Apple is included in that 40-cent range.

Apple Store revenues have also grown, haven't they? Looking at what's happening, UBS noted that store revenue grew by 5% in September, and they believe that App Store growth could continue to accelerate in services as well, given the strong demand for the iPhone, which is another element we can add in Apple's favor.

332 , do you think it will at least surpass the peaks of 345, and I expect it will reach 400 at some point? Lance, how long do we have to wait to see Apple's stock at 400? One last question. You will have to answer that .

If you could tell me exactly where the market will be next year, I could tell you when Apple's stock will reach $400. But look, there are a lot of things going on, and predicting such a long-range target is extremely difficult. Is $400 a reasonable target for Apple?

Yes, if the markets continue to rise, $400 is a reasonable target . But again, at the moment Wall Street's targets are between $360 and $380. I think if you're really looking for your Apple investment thesis for next year, it's best to stay in the 360 to 380 range.