Should You Buy Apple Stock in a Downtrend?

The market is off to a roaring start in 2024. For tech companies, the excitement around artificial intelligence (AI) is fueling bullishness across the industry.

But it seems that one company, historically known as a genius marketer and product innovator, is lagging behind. So far this year.Apple Inc. （Nasdaq Resonancestock (market)(Code: AAPL)The stock is down about 12% and the stock is near its 52-week low.

Let's analyze what's going on at Apple. Is now the time to buy this mispriced and possibly undervalued stock? Or should investors stay away as Apple's stock price falls?

Innovator's Sleep

When it comes to innovation, it's hard not to include Apple in the discussion. The company has revolutionized the communications, entertainment, and even medication industries with its ubiquitous products such as the iPod, iPhone, and iWatch.

But Apple hasn't brought many new products to the table in recent years. Last month, the company sent shockwaves through the tech world when it announced it was abandoning its efforts in the electric vehicle (EV) space.

Over the past 18 months.Microsoft,Amazonrespond in singingAlphabetCompetitors such as Apple are gaining a lot of attention in the artificial intelligence (AI) space. Strangely, however, Apple has been left out of these discussions.

Now, with the exit of electric cars and a seemingly shy stance on artificial intelligence, investors are beginning to question Apple's approach to development.

Not the first time Apple has been late to the party!

Microsoft announced a multi-billion dollar investment in OpenAI, the developer of ChatGPT, kicking off an artificial intelligence revolution. Amazon and Alphabet quickly followed suit, each partnering with a competing platform called Anthropic. WhereasNvidia) has been the poster child for AI, as the market demand for the company's graphics processing units (GPUs) and data center services has been very high.

After abandoning its electric car project, investors have been looking for answers about Apple's place in the artificial intelligence debate. While the company briefly took the spotlight off its peers with the acquisition of a startup called DarwinAI, that attention was fleeting at best. Details on the DarwinAI acquisition are scarce, adding to the frustration of investors who are wondering how Apple will play a role in the AI movement.

Apple may have missed the boat, and not for the first time. With Microsoft, Amazon, Alphabet, and evenoracle bone inscriptions (an early form of Chinese script)Unlike Apple, which has completely missed out on the huge opportunities in the cloud computing space.

Now, with the company's artificial intelligence ambitions still only a huge mystery, investor interest in the iPhone maker seems to have reached its limits.

Buy low?

Of the "Magic Seven" stocks, only Apple and Tesla are down so far this year. In addition, Apple shares have risen only 3% over the past year.

My concern with Apple is that the company doesn't seem to have a sense of adventure or urgency. Competitors are investing aggressively in many different facets of artificial intelligence (AI), which could ultimately make Apple a forgotten name in technology.

I see several opportunities for Apple investors right now. If you are an existing holder of the stock, you can now utilize the Average Dollar Cost methodology to lower your cost basis. The important thing to note here is that your conviction must remain firm. Otherwise, buying the stock simply because it's falling isn't a prudent strategy.

Given Apple's rich history of product innovation, it's hard to get carried away with the company. However, considering how many question marks remain on Apple's growth roadmap, a forward earnings multiple of nearly 26 times is too expensive for the stock for me.

If you're looking for opportunities in artificial intelligence (AI), I'd avoid Apple stock. There are plenty of other well-tested, established companies in the market. I think the best bet is to focus on Apple's position in AI, and to follow any progress on strategic郃 partnerships or new products and services.

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Suzanne Frey, an Alphabet executive, is a member of The Motley Fool Board of Directors, and John Mackey, former chief executive officer of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool Board of Directors. John Mackey, former Chief Executive Officer of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's Board of Directors. Adam Spatacco has holdings in Alphabet, Amazon, Apple, Microsoft and Nvidia. The Motley Fool holds recommendations for The Motley Fool owns shares of Alphabet, Amazon, Apple, Microsoft, Nvidia, and Oracle.The Motley Fool recommends the following options: long Microsoft January 2026 $395 calls and short Microsoft January 2026 $405 calls.The Motley Fool has a disclosure policy.

Should You Buy Apple Stock on a Downtrend? This post was originally published by The Motley Fool.