We recently compiled the following list. 8 most profitable blue chip stocks to invest in. In this article, we’ll take a look at how Apple Inc. (NASDAQ:AAPL) stacks up against other profitable blue-chip stocks.
September’s inflation report was better than expected, showing that inflation remains strong. Headline inflation rose 2.4%, slightly above expectations of 2.3% and down from 2.5% in August. Month-on-month, the CPI rose by 0.2%, exceeding expectations of 0.1%.
The core inflation rate, which excludes food and energy, also exceeded expectations at 3.3%, compared to the expected 3.2%, marking a slight increase from August. On a monthly basis, core CPI rose 0.3%, in line with August’s figure but above expectations for a 0.2% rise.
Following this report, markets are predicting either a 25 basis point rate cut or no rate cut at the next Fed meeting. According to the CME FedWatch tool, 79.9% of interest rate traders expect rates to be cut by 450 to 475 bps at the next Fed meeting, while 20.1% expect rates to remain unchanged. At the beginning of the month, 32.1% expected a 50bp rate cut, and 67.9% expected a 25bp cut.
Understand inflation trends and the Federal Reserve’s strategy
Despite continued inflation, IBM Vice Chairman Gary Cohn believes the Fed will cut interest rates by 100 bps this year. In an interview with CNBC:money movers, He suggested that the United States is experiencing something of a soft landing, with inflation falling but not steadily. He said inflation is likely to hover around this level, making it difficult to reach the Fed’s 2% target.
Cohn noted that for the first time in nearly 20 years, the Fed is balancing its dual responsibilities of employment and price stability, focusing primarily on both at once. He believes the Fed is making the right decision, but is now in a delicate position after missing the opportunity to meet this year.
Cohn expects the Fed to cut rates by a total of 100 basis points this year, and perhaps 25 basis points in the coming months. In response to a question about the inflation target, he said he thought it would be better to slightly exceed the target inflation rate, and that an inflation rate of around 2.2% would be more acceptable if the economy was growing than below the target. He suggested that it would be possible.
Cohn also highlighted concerns about geopolitical risks, saying global tensions could lead to inflationary pressures through supply chain disruptions and higher transportation costs.
our methodology
In this article, we use a stock screening tool to identify nearly 30 stocks with market caps of over $100 billion and TTM net income of over $10 billion. We then narrowed the list to the eight stocks that have a five-year compound annual growth rate of net income of greater than 10% and are most widely held by institutional investors. The most profitable blue chip stocks are listed in ascending order of hedge fund sentiment from Insider Monkey’s Q2 database of 912 hedge funds.
Why are we interested in stocks that hedge funds invest in? The reason is simple. Our research shows that by mimicking the top stock picks of the best hedge funds, you can outperform the market. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 points (Learn more here Please take a look).
A wide view of the Apple Store showing the range of products offered by the company.
Apple Inc. (NASDAQ:AAPL)
Market capitalization: $3.49 trillion
5-year net profit CAGR: 12.85%
TTM Net Income: $101.956 billion
Number of hedge fund holders: 184
Apple Inc. (NASDAQ:AAPL) designs, manufactures and markets a wide range of technology products, including smartphones, computers, tablets, wearables and accessories, as well as providing related services. The product line includes the iPhone, a series of smartphones that run on the iOS operating system. It is the 5th most profitable stock on our list.
The Mac product line consists of macOS-based personal computers, including laptops such as the MacBook Air and MacBook Pro, and desktops such as the iMac and Mac Pro. The iPad is a multipurpose tablet that runs iPadOS and includes models such as the iPad Pro and iPad mini.
Apple (NASDAQ:AAPL) operates primarily on a geographic basis, with reportable segments including the Americas, Europe, Greater China, Japan, and Rest of Asia Pacific. Each segment is managed separately to meet local customer needs and market conditions.
On October 6, Bloomberg reported that the company is moving away from its traditional annual product upgrade cycle, allowing for more frequent releases and fewer delays. In the past, the company has updated its major products, such as the iPhone and Mac, on a set schedule, announcing software in June and releasing devices in September and October.
However, as the product range expanded, this approach became less practical. As a result, Apple (NASDAQ:AAPL) is adopting a phased release strategy, as evidenced by its upcoming AI tool Apple Intelligence, scheduled to be released with iOS 18.1 on October 28th. The purpose of this transition is to improve innovation and enable us to generate revenue outside of the holiday quarter.
Entire AAPL 5th place While we see the potential of AAPL as an investment, we believe AI stocks are more likely to deliver higher returns and do so in a shorter time frame. If you’re looking for AI stocks with more promise than AAPL, but trading at less than 5x earnings, check out our report. cheapest AI stocks.
Read next: $30 trillion opportunity: Morgan Stanley’s 15 best humanoid robot stocks to buy and Jim Cramer says NVIDIA has ‘become a wasteland.’
Disclosure: None. This article was originally published on Insider Monkey.
