Apple Stock: The Strongest Shield Against Rate Hikes

Dec. 19, 2021 1:28 AM ETApple Inc. (AAPL)65 Comments

Summary

  • With inflation running its hottest course in 40 years, the Federal Reserve has decided to accelerate the stimulus tapering schedule and prepare for raising interest rates as early as March.
  • While rate hikes have historically deterred investors from growth stocks due to concerns over eroding valuation prospects, the Apple stock has remained largely resilient.
  • Apple is expected to realize additional upsides ahead, sustained by robust demand for its existing offerings and new opportunities arising from nascent technologies like AR/VR and autonomous vehicles.
  • Its strong net cash position also provides sufficient dry powder to fund additional growth in coming years without incurring additional costs of capital amidst rising interest rates.
  • As such, Apple's bullish thesis remains intact as it approaches a $3 trillion valuation, despite broader market valuation risks ahead.

iPhone 12 Pro Max

guvendemir/iStock Unreleased via Getty Images

As one of the world’s best performing stocks, Apple (NASDAQ:AAPL) has gained close to 40% this year. The stock, which last peaked at $182.13 not too long ago, is currently less than 7% from being the first U.S. publicly listed

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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