Market Overview

Pro: Why Apple's Stock Is Undervalued

Pro: Why Apple's Stock Is Undervalued

With the stock down more than 15 percent over the past month alone, Apple Inc. (NASDAQ: AAPL) could be seen as being in a "period of undervaluation," ARK Investment Management CEO Cathie Wood told Bloomberg TV.

What Happened

Wall Street analysts are wrongly focusing their attention on how many iPhones Apple is able to sell and their corresponding average selling prices, Wood said during an interview on "Bloomberg Technology." The Street's simplistic approach to Apple's stock overlooks the company's Services businesses — which continue to expand beyond the App Store and into new ventures like health care and augmented reality, she said. 

As a services-focused company, Apple's stock warrants a higher multiple compared to where the Street is pricing Cupertino as a hardware company, Wood said. 

Movement From China

The ongoing Sino-American trade dispute may be shifting positively, as a lot of action is happening "behind the scenes," Wood said. China's government is busy cutting taxes and import duties to address the weakening economy, she said.

The eventual outcome of the U.S. and China trade dispute could result in "lower tariffs across the world," which will be a "very positive result long-term," in Wood's view. 

A failure to reach any agreement could result in temporary sanctions, she said. But they will be temporary, as elected politicians typically face a losing battle when trying to impose new taxes on products that are adored by consumers, the CEO said. 

"These are products that delight the consumer and these are the people politicians want to make happy." 

Related Links:

Everything You Need To Know Ahead Of The G20 Summit

3 Reasons To Love Apple Right Now: iPhone, Services, Wearables

Photo by Daniel Lu/Wikimedia. 

Posted-In: App Store Apple Services Bloomberg Bloomberg Technology Cathie Wood China tariffsMedia Best of Benzinga


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