Jim Cramer On Apple Stock: 'It's Only A Matter Of Time Before China Reignites'

Jim Cramer, the host of CNBC’s “Mad Money,” has urged investors to remain patient amid the recent challenges faced by Apple Inc AAPL.

What Happened: Cramer acknowledged the difficulties Apple has faced in 2024, including a drop in stock prices due to cautious analyst comments, regulatory obstacles, and sluggish iPhone sales in China, reported CNBC. Despite these issues, Cramer advised investors to have “patience, patience, patience,” maintain their Apple stock and not trade it.

He highlighted that Apple is a top performer and even suggested that the stock could fall further without him selling. Cramer also mentioned that the company’s AI-integrated iPhones and the resolution of China-related concerns could lead to long-term gains.

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"I continue to believe as long as China has a pall cast over it … we're not going to be able to make a lot of headway," Jim said.

"Own it, don't trade it, in part, because it's only a matter of time before China reignites." 

Bank of America, in contrast, is optimistic about iPhone sales, noting that the flagship device’s share of the smartphone market increased in 2023.

Evercore ISI also provided reasons to hold onto Apple stock, citing AI integration, capital allocation, and the underappreciated Service business as potential drivers for future stock growth. "As AI enabled tools become more mainstream, we think there will be a strong value proposition to run AI on the edge (inferencing). The advantage of doing on the edge (iPhone) would be lower latency, better security and easier/cheaper accessibility," the analysts wrote.

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Why It Matters: The recent turbulence in Apple’s China market has made investors, including Cramer, skeptical about the tech giant’s short-term prospects. Cramer expressed hesitance about the current situation and indicated a need for stock prices to drop significantly before considering a position rebuild.

However, the stock market is on the verge of a “virtuous investment cycle” that could drive corporate profits to new heights, according to a recent note from Bank of America’s strategist Savita Subramanian. This surge in spending is expected to boost S&P 500 earnings per share.

Apple’s pricing strategy over the past 17 years has played a crucial role in driving both its unit sales and revenue share in the competitive smartphone market, according to a recent note from B of A Securities analyst Wamsi Mohan.

Deepwater Asset Management managing partner Gene Munster thinks that while Tim Cook‘s first-time mention of AI during an Apple shareholder meeting in January failed to excite investors, he thinks Apple stock action in 2024 reminds him of Mark Zuckerberg‘s Meta. He also believes Apple’s AI play can move the earnings needle for Cupertino in double-digit percentages.

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