BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Is Now the Time to Buy Apple?

This article is more than 10 years old.

Apple is an emotional stock. The company made a fortune with products designed to subtly manipulate the way we felt about them, and that seems to have

Image via CrunchBase

translated to its market performance as well. People get excited, people get scared, people fall in love and people get angry. This was going very well earlier this year – investors were in a giddy phase and analysts were promising the world. The tide turned shortly after the launch of the iPhone 5, when the company that could do no wrong became the company that could do no right. Last night that story continued, when Apple stock tumbled 10% after a perceived disappointing earnings call.

This calamitous tumble feels like an overreaction. The company, after all, reported record profits. And that’s with a nearly complete revamp of its product line. You look at the numbers now, and Apple is trading at a price to earnings ratio of about 10. That’s lower than Microsoft, IBM and the S&P average. Apple may not be as tempting and shiny as it once was, but I don’t think that its prospects are worse than Microsoft’s. This shock moment is going to normalize, at least in a little bit.

When you look past the numbers, there is still faith that Apple can continue to be the company that it was. That same Apple emotion could fuel another rise if the company finds a way to spark it again. What Apple is seeing now is a brand problem in the eyes of investors. It’s been so successful at managing hype that it’s backfiring. Without constant, unheard-of forward motion, people get jumpy.

Some are saying Apple is finished and others are calling for Tim Cook’s head, but this company could still impress. New products are possible, as is a more concerted move into China and other new markets. When that happens, we could easily see another ramp-up.

Related: