We recently published a list of 11 Best Consumer Electronics Stocks to Invest in Now. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL)) stands against other best consumer electronics stocks to invest in now.
The global consumer electronics market has seen significant growth, reaching a valuation of $755 billion in 2024, with projections to hit $1.15 trillion by 2031, according to Research and Markets. This growth is driven by rising demand for innovative devices that enhance convenience. Consumer electronics, including smartphones, tablets, smartwatches, and connected home devices, have transformed how people live, work, and connect.
Continuous innovation also keeps the industry competitive, with companies focused on attracting consumer interest. Despite global economic challenges, the market remains resilient, driven by advancements in AI. In 2023, smartphone shipments reached about 1.2 billion units, reinforcing this category’s profitability. The market is projected to grow to $1.13 trillion by 2025, with a 3% annual growth rate. North America, particularly the US, is at the forefront of the consumer electronics market, leading globally in terms of adoption and demand. The region is expected to maintain this leadership due to its swift embrace of cutting-edge technologies. In the US, the fast-paced lifestyle increasingly revolves around digital solutions, with automation becoming a key priority.
Tim Seymour, Seymour Asset Management CIO, appeared on CNBC’s ‘The Exchange’ on January 18 to signify upcoming events and how they might correlate with current market dynamics. Seymour notes that the tech sector, which includes consumer electronics, has rallied under President Trump, creating a favorable hiring environment. He believes that at least half of the MAG7 stocks have defensible valuations. Regarding tariffs, he suggests that consumer-centered sectors, like consumer electronics, will be impacted first, with reports indicating that tariffs could negatively affect the economy, as highlighted by the World Bank and IMF.
Discussing the economic implications of tariffs, Seymour expressed skepticism about tax increases while acknowledging uncertainty around reductions. He reflected on the tariffs imposed against China in 2018 and 2019, which impacted manufacturing, including consumer electronics. While tariffs may hinder growth, he noted that a strong dollar could enhance the competitiveness of US products abroad. Seymour focused on tech companies with solid valuations for their growth potential. Large MNCs in consumer electronics may perform better with upcoming announcements and are less vulnerable to strategic influences than smaller firms. While he is cautious about growth scares overshadowing inflationary pressures in 2025, he maintains a positive sentiment overall.
Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the top consumer electronics stocks. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) is a tech giant known for its innovative consumer electronics products. Its popular products include iPhones, Mac computers, iPad tablets, and wearables like Apple Watches and AirPods. It also provides an ecosystem of services like app stores, streaming services, and cloud solutions, which enhance the user experience across its entire product line.
Recent years have witnessed a slowdown in iPhone sales growth. But the company’s investments in AI, showcased by the recent introduction of Apple Intelligence, will reignite growth. Apple Intelligence, which is a suite of AI-powered tools and services integrated into the iPhone, assists users with tasks like email composition, notification summarization, and appointment scheduling.
Following its launch of Apple Intelligence, Rosenblatt Securities maintained a Buy rating for Apple Inc. (NASDAQ:AAPL) with a $262 target price on January 27. This was despite concerns about disappointing iPhone performance in the December quarter, echoed by UBS. While Apple Intelligence and upcoming software updates hold promise for future growth, intense competition from Chinese brands like Huawei, which offer advanced AI and aggressive pricing, poses a significant challenge. The company experienced a 7.7% sales drop in China in FY24. This decline came from competition from domestic brands and a sluggish Chinese economy. To mitigate this, it’s shifting its focus from hardware sales towards revenue streams like its App Store services.
Mar Vista Strategic Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q3 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) stock was strong in the quarter as investors viewed the company’s generative AI roadmap and iPhone 16 product cycle positively. The market was reminded of the strength of the Apple ecosystem as management demonstrated how generative AI solutions would be integrated into its iOS 18 operating system, which was broadly released in the iPhone 16 late in calendar Q3. We believe Apple’s generative AI-enabled products should spur a meaningful iPhone upgrade cycle and create new avenues of monetization through its app store and advertising offerings. We believe this will support intrinsic value growth that will range between high single digits and low double-digits over our investment horizon.”
Overall, AAPL ranks 1st on our list of best consumer electronics stocks to invest in now. As we acknowledge the growth potential of AAPL, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
