Apple: New Peaks or Imminent Collapse?

Berkshire Hathaway’s Apple Sell-Off: Investor Concerns

In the past three quarters, the announcement that Berkshire Hathaway, the investment firm led by the legendary Warren Buffett, has sold around $516 million worth of Apple shares has raised numerous questions among investors.

Berkshire’s stake in Apple has been reduced by 56%, at an accelerating pace, leading many to wonder how it is possible that the greatest investor of all time could make such an apparent misstep.

The AAPL stock price has continued to rise, contradicting the expectations of those who believed Buffett’s decision might signal a downturn for the tech giant.

This anomaly has sparked concerns: does Apple still have growth potential, or are we nearing another market crash?

Apple’s Valuation: An Impressive Company, But Overpriced?

Apple undoubtedly stands as one of the world’s most robust and profitable companies.
With a strong brand, a loyal customer base, and a product ecosystem that integrates seamlessly, it has managed to build a technological empire.

However, worries about AAPL’s valuation persist.
Currently, Apple is trading at a price-to-earnings (P/E) ratio of about 30.
For a large company like Apple, such a valuation level raises eyebrows among many analysts and investors.

Typically, such high multiples are reserved for rapidly-growing firms or companies in emerging sectors.
Although Apple continues to innovate and enhance its products, it no longer appears capable of delivering growth rates that warrant such a high valuation.

Future Challenges for Apple: Troubled Projects and Slowed Innovation Cycle

Another area of concern revolves around Apple’s product pipeline, which seems less promising than in previous years.
The company has recently abandoned its ambitious electric vehicle project, an initiative many hoped would revolutionize the automotive sector.

Additionally, it’s been confirmed that production of the Vision Pro augmented reality headset will be cut for 2024 and 2025 due to lower-than-expected demand.
Apple is attempting to shift its focus to a lower-priced model, but this shift indicates a lack of market enthusiasm for its new innovations.

Even the iPhone, which has long been the cornerstone of Apple’s success, is showing signs of fatigue.
Reports of production cuts for the upcoming iPhone 16 suggest that consumer demand is no longer as robust as it once was.

Technical Analysis: What’s Happening in the Market?

From a technical standpoint, Apple shows signs of weakness.
Although the stock price is once again aiming toward its all-time highs around $240, the Relative Strength Index (RSI)—an indicator measuring the speed and change of price movements—has recently started to decline from overbought levels (above 70), which could indicate a potential exhaustion of bullish momentum.

This divergence between price and RSI is often interpreted as a bearish signal, raising further questions about the stock’s future trajectory.