Apple’s stock has seen a remarkable surge in recent years, rewarding patient shareholders with significant gains. However, despite the stock’s impressive performance, concerns are mounting over the stagnant growth of Apple’s iPhone business. While the company’s services arm has provided some support, the lack of substantial revenue growth raises questions about the sustainability of Apple’s success.
The iPhone, which accounts for approximately half of Apple’s revenue, has experienced stagnant unit sales and revenue since early 2022. Although sales tend to spike during the launch of new models and the holiday season, the overall trend remains flat. This stagnation is a cause for concern, considering the iPhone’s significance to Apple’s overall business.
Apple’s foray into the artificial intelligence (AI) arena has been a key driver of investor optimism. However, the impact of AI-capable iPhones on the company’s growth remains uncertain. Other smartphone brands also offer online tools comparable to Apple Intelligence, potentially diluting any competitive advantage.
In contrast, e-commerce technology and service provider Shopify presents a more promising upside. Shopify enables merchants to build their own e-commerce websites, offering a comprehensive suite of solutions for businesses. The company has experienced real growth, facilitating the sale of $67.2 billion worth of goods and services in the last quarter alone, representing a 22% year-over-year increase.
Furthermore, the e-commerce industry as a whole is not only growing but also evolving. Many merchants and manufacturers now prefer to establish direct relationships with customers, rather than relying on online middlemen. This shift presents a significant opportunity for Shopify, as it helps businesses cultivate their own online presence.
According to market research firm Precedence Research, the worldwide e-commerce industry is projected to grow at an average annual pace of nearly 15% through 2034. With only about 16% of retail sales conducted online in the United States, there is ample room for growth in this sector.
While Apple’s stock has reached record highs, Shopify shares remain below their late-2021 peak, despite significant gains since 2022. This discrepancy suggests that Apple may be overvalued, while Shopify’s potential may be underestimated.