Apple Inc. (AAPL): Will The Stock Tumble Below $400?

At the end of January, I predicted that Apple Inc. (NASDAQ:AAPL) would touch $400 per share before it crossed $500 again. While the stock made a valiant run to $480 in an effort to prove me wrong, it has since shown significant weakness that brought shares within less than a dollar of recent lows during last Friday’s trading session. Still trading with a P/E below 10 and looking like a real value, investors are beginning to ask themselves whether the stock will tumble, soar, or stagnate. While there seem to be several catalysts lurking in the shadows, none has pushed to the forefront to take control of the stock’s future.

Potential positives
While there is little evidence that either product is imminent, the release of either the iWatch or iTV has been widely rumored and is drawing attention from investors. News of the next-generation iPhone, as well as the release of a cheaper version that will allow the company to make a significant push into the emerging markets, could likewise serve as a positive, but the timing of each of these events is not likely to drive the stock at present. There’s also some concern that the iPhone 5S — if Apple follows its regular pattern — could be a letdown.

The most plausible positive is an announcement from Cupertino of an initiative to put more cash back into the hands of Apple Inc. (NASDAQ:AAPL) shareholders. Ever since the shareholder lawsuit leading up to the last shareholder meeting, the issue has been on the minds of many investors. Apple Inc. (NASDAQ:AAPL)’s reported $137 billion in cash could make shares more attractive if some of that amount began to flow.

Stumbling blocks
Unfortunately for Apple Inc. (NASDAQ:AAPL), the number of potential negative catalysts is probably longer than the positive ones. Facebook Inc (NASDAQ:FB)‘s announcement of Facebook Inc (NASDAQ:FB) Home has the potential to pressure Apple sales, as the platform exists solely on Google Inc (NASDAQ:GOOG) Android devices. In addition to integrating the Facebook Inc (NASDAQ:FB) experience more fully into the phone, Facebook Home apparently streamlines the operation of Android in such a way as to make it more user-friendly, an area Apple has historically commanded. If evidence emerges that Facebook Home is gaining traction, expect to see further concerns for Apple Inc. (NASDAQ:AAPL).