Apple Inc. (AAPL) has been a hot topic in the market lately, with many investors and analysts wondering if the tech giant’s stock price is justified. However, CNBC’s Jim Cramer is taking a different approach and asking a more specific question: what exactly are we paying for when we invest in Apple?
Cramer points out that Apple’s stock has been on a steady rise, reaching a market cap of $2.14 trillion. But he questions what justifies this valuation. Is it the company’s strong financials and consistent earnings growth? Or is it the brand loyalty and popularity of their products?
The answer, Cramer argues, is a combination of both. While Apple’s financials are impressive, with a 25% growth in earnings per share and a return on equity of 73%, their brand and customer base are also major factors. The company has a devoted following of customers who are willing to pay a premium for their products, giving Apple a competitive edge in the market.
So, what does this mean for retail investors? Cramer advises that while it may be tempting to jump on the Apple bandwagon, it’s important to consider the risks and potential for growth. While the company’s current valuation may seem high, there is still room for Apple to expand into new markets and continue their growth trajectory.
In the end, Cramer reminds us that investing in Apple is not just about the numbers, but also about the brand and the loyalty of its customers. And while it may be a pricey stock, it’s worth considering for long-term investors who believe in the company’s potential for continued success.