Apple Is Running 'The Greatest Business In The History Of Planet Earth,' But Is Its Stock Overvalued?

Zinger Key Points
  • Stephanie Link says she doesn't expect Apple to announce "game-changing products" during the "Far Out" event Wednesday.
  • Regardless, Josh Brown says he still expects the stock to continue to trade with a premium valuation. 

Apple Inc AAPL shares have held up well relative to the overall market in 2022.

CNBC's "Fast Money Halftime Report" panel discussed the tech giant's valuation on Tuesday, with the stock trading flat ahead of the company's "Far Out" event this week. 

"[Apple's] a good company, but it's not at a compelling valuation at 20 times forward estimates, and I don't think these are game-changing products that are going to be announced this week," Hightower Advisors' Stephanie Link said Tuesday on the show.

What To Know: Link said she has been paying close attention to Apple's lead times, which have shown gradual improvement, pointing to easing supply chain constraints. 

As a result, her main concern has shifted to demand, she said: "I think it will be strong, but does it stay as strong? They were a beneficiary from stay-at-home for sure."

Link told CNBC that she is "very underweight" Apple at current levels, but she maintains exposure through Broadcom Inc AVGO and Berkshire Hathaway Inc (NYSE: BRK-A) (NYSE: BRK-B).

Virtus Investment Partners' Joe Terranova responded to Link's demand concerns, noting that he is still stuck on the supply side.

"I think consumers will show up for these products, and now it just comes down to can Apple deliver on the inventory," he said. 

Although he acknowledged that Apple's valuation is "a little bit rich," he thinks the fundamentals justify the premium, he noted. 

Related Link: Survey Finds Apple Car Captures Significant Mindshare Even Before Launch: Should Automakers Fear?

Terranova told CNBC that he recently added to his Apple position, making it the largest position in his personal portfolio. 

Following commentary from Link and Terranova, Ritholtz Wealth Management's Josh Brown chimed in and questioned whether valuation even deserved to be the topic of conversation.  

"Apple has a stability of cash flow and a continuity of ... shareholder support ... that no other company has. Arguably, that would earn it a premium valuation. The problem with that is if you buy it today at that premium valuation, then you're essentially not in position to earn as much," Brown said. 

Investors are likely to continue to value Apple's stability amid current market conditions, he said, adding that he expects the stock to continue to trade with a premium valuation. 

"Apple's got a lot of levers to pull. The App Store is the greatest business in the history of planet Earth, quite frankly — the highest margins, the fastest growth, the most dominance — that's not changing in the next six months regardless of what happens in the U.S. economy," Brown said. 

AAPL Price Action: Apple has a 52-week high of $182.94 and a 52-week low of $129.04.

The stock was down 0.94% at $154.34 at time of publication, according to Benzinga Pro.

Posted In: Long IdeasNewsEventsTrading IdeasCNBCJoe TerranovaJosh BrownStephanie Link