Apple Outperforms Market, But Are Big Growth Days in the Past?


Apple (AAPL -0.81%) is still making a lot of money and will continue to do so. But, in this video clip from “The Rank” on Motley Fool Live, recorded on July 13, Fool.com contributor John Bromels outlines why he thinks the tech giant’s major growth has already happened.

John Bromels: They are essentially minting cash. Apple through device sales and services and those things, Microsoft (MSFT -1.69%) through its subscriptions to its Office apps, and Alphabet (GOOGL -5.63%) (GOOG -5.81%) through its ad revenue on Google Search and YouTube. All three of these companies are bringing in cash and are deploying that cash on a multitude of different projects and acquisitions and other efforts. Which ones of those are going to pan out and be the next big thing for these companies? I don’t know.

What I did essentially was I said, as you said, Apple’s got the $2.4 trillion market cap, and therefore I see less of a path to growth for Apple at $2.4 trillion than I do for the others at $1.9 and $1.5 trillion respectively. Now, I will say Apple also seems to have, as now a dividend stock, Apple has essentially seems to have made the decision, “We’re going to use some of this cash to pay a dividend. We are going to use some of this cash to reward our investors.”

To me, that indicates that this is a company that realizes that its big growth days are probably behind it. The same is true, of course, I believe for my No. 3 pick. Really, for me, the reason I put Apple below those other two is because it came down to valuation. It’s got the biggest market cap, I think therefore it has the least room to run.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Bromels has positions in Alphabet (A shares), Alphabet (C shares), Apple, and Microsoft. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.





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