How to buy Apple stock (AAPL)
Updated: July 26, 2024
Apple has offered computers, smartphones, tablets and other devices since 1976. The company’s commitment to innovation turned it into the world’s first trillion-dollar corporation. Apple’s total revenue in fiscal 2023 amounted to $383 billion, while the company’s net income was approximately $97 billion. The famed smartphone makes up more than half of Apple’s total sales. Those are some pretty impressive numbers.
While Apple has a historic legacy, sales have been slowing. Revenue decreased by 3% in fiscal 2023, while most prominent tech companies posted double-digit revenue growth rates. However, some investors believe Apple Services and artificial intelligence can accelerate revenue growth.
This guide will explain how to buy Apple stock and provide some other details to consider before purchasing shares.
Step by step on how to buy Apple stock
Buying Apple stock is a straightforward process, since it’s a publicly-traded corporation. Follow these steps to add the Silicon Valley-based company to your portfolio.
- 1.
Open a brokerage account: Brokerage firms allow investors to buy and sell stocks, funds and bonds. You’ll have to open an account with one of these firms to buy Apple stock. It’s a good idea to compare several choices and determine which brokerage account has the best features for your long-term goals. You’ll have to provide personal information like your name, email address and Social Security Number to open a brokerage account.
- 2.
Open an order ticket: Every trade starts as an order ticket. Investors can choose between market orders and limit orders. Market orders are recommended for beginners since they go through at the current market price. Limit orders allow you to wait for a stock to fall to a certain level before the broker buys shares on your behalf. These orders only go through when the stock reaches the designated price.
- 3.
Specify Apple stock: Some order tickets let you fill in “Apple” and show you the stock. However, other brokerage accounts may require that you provide the ticker symbol (Apple’s ticker is AAPL). The order ticket will show Apple’s current price, and you can refresh it to see Apple’s updated price.
- 4.
Decide on the number of shares: After selecting Apple stock, you must specify how many shares you want to buy. Your brokerage account will only let the order go through if you have enough cash to make the purchase. For example, you’ll receive an error message if you attempt to buy 10 Apple shares but you only have $500 in your account. However, investors can purchase fractional shares without the funds to buy an entire Apple share.
- 5.
Execute the order: Double-checking your order ticket is a good idea to ensure you buy the correct number of Apple shares. Once you’re ready, place the order. Market orders go through immediately, and you should see Apple stock in your portfolio after refreshing your screen. Limit orders will go through when the stock reaches your designated limit price.
You’ll need to create a brokerage account before buying Apple stock. Here are some of the top choices to consider.
Interactive Brokers offers low trading fees and robust trading tools — major assets to day traders and DIY investors. Lower-volume traders will also appreciate that they can access commission-free trading through the IBKR Lite plan.
If you’re an active investor or options trader looking for a way to save money on trades, you may want to check out discount broker tastytrade. The online service has some of the lowest prices around.
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About Apple
Apple is the leader in the consumer electronics industry. It’s been leading the market with iPhones, Macs, iPads and other devices. However, the company didn’t always have success. Apple almost went bankrupt, and Microsoft gave the company a $150 million lifeline to stay afloat. Speculation is that Microsoft only saved Apple to keep regulators at bay amid monopoly concerns. It certainly worked out for long-term Apple investors.
Is Apple a good stock to buy?
Apple has comfortably outpaced the S&P 500 over the past five years, delivering a 343% gain compared to the index’s 85% gain. The company’s substantial market cap ranks it in the S&P 500 and the Nasdaq Composite. Apple’s size makes it a significant beneficiary of index investing.
However, iPhone sales have been slowing down, including some quarters with negative year-over-year growth rates. Apple’s remaining consumer electronics products suffered the same fate and comprised most of the company’s total revenue. Apple Services is the only part of Apple’s business that’s still growing, making up roughly 25% of its total revenue.
Apple’s decelerating growth rates and high valuation leave much to be desired, especially compared to other big tech stocks. Microsoft, Amazon and Alphabet each have double-digit revenue growth in multiple business segments.
Meta Platforms makes almost all its revenue from ads but also reported 27% year-over-year revenue growth in Q1 2024. Apple is not growing in the key Consumer Electronics category, while many big tech companies continue to post double-digit revenue and net income growth rates.
However, betting against Apple has been a lousy proposition for many years. Investors shouldn’t make decisions solely based on Warren Buffett, but it is quite a testament that Apple makes up more than 40% of his portfolio. Buffett’s history of outperforming the market and bullishness for Apple stock can inspire investors to hold their shares.
Apple is not the most captivating stock right now, but the company’s history of innovation gives it a moat. Furthermore, rising services revenue and artificial intelligence initiatives can lead to renewed growth. Still, other mega-cap tech stocks have better financial growth and catalysts that are having an immediate impact on its shares.
Pros and cons of buying Apple stocks
Pros
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Services revenue has maintained a 10%+ year-over-year growth rate, which is a respectable growth rate among big tech companies
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Artificial intelligence initiatives can result in higher revenue and earnings growth
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Top holding in many index funds, Apple stock benefits from passive investors
Cons
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Growth has been slowing down while other big tech companies are posting year-over-year revenue growth above 10%
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iPhone sales have been dropping and make up more than half of the company’s total revenue
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Declining revenue and rising stock price are a mismatch that’s likely to be corrected
FAQs
Marc Guberti is a certified personal finance counselor and a freelance writer who resides in Scarsdale, New York. His work has been featured in US News & World Report, Newsweek, InvestorPlace, and other publications.
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