Since launching the iPhone a few years ago Apple’s stock has become stratospheric but all of the company’s riches do not a robust stock make. Instead, Wall Street loves money-losing Amazon and Apple is out of favor.
Catch The Fever
What’s going on? Is Wall Street that fickle? The answer is yes. Despite untold and ill gotten riches, Apple nemesis Microsoft made billions from Windows and Office.
Unfortunately, and despite willingness to lose billions more in unprofitable businesses such as search, advertising, tablets, media players, and smart phones, Microsoft’s stock is like a disease that no one wants.
Apple seems to have contracted the same disease. Though our favorite Mac maker has a better track record at creating new revenue and profits streams, the what-have-you-done-lately crowd has pushed the stock down, down, and more down.
Apple is out of favor these days, despite record sales and profits. Does that sound familiar? Microsoft’s been doing the same for a decade and still has nothing more than Windows and Office.
To be fair to Apple, it hasn’t been that long since the company lost the ability to innovate. The iPad mini, many will argue, is merely an iterative model, an obvious step in the iPad’s evolution.
With innovation seemingly dead, the stock has been hammered, despite some analysts with target stock prices between $700 and $1,000.
Meanwhile, Amazon, which has been losing money of late, has become a darling on the street merely for trying to disrupt Apple’s gravy train of profits by pushing cheap, plastic, single-minded Frankendroid tablets into the market– and losing record amounts in the process.
For whatever reason, those engaged in the stock market seem to prefer losers to winners. As of late, Apple seems slumped and lumped into the loser bleachers.
If George Orwell were alive today would he be buying Apple stock because the company is well run and profitable, or would he prefer the trend of buying into trumped up companies that simply know how to spend money, but don’t know how to make money?
As it is now, he’s probably rolling over in his grave. Just like Steve Jobs.