Ask Matt: Is Apple a hot tech stock to buy?
Q: Is Apple a hot tech stock to buy?
A: Apple has been a red-hot tech stock. But now - it's a blue chip. Big difference.
The newer less-exciting future of Apple's shares became clear Tuesday after the company reported an adjusted quarterly profit of $1.96 a share, beating estimates by nearly 5%. Shares inched up about 1% in after-hours trading. Shares closed regular trading down 73 cents to $114.55. Meanwhile, other tech companies pushing into a post-smartphone world driven by the cloud are getting more attention. Shares of Facebook, Amazon, Microsoft and Alphabet are up 32%, 98%, 15%, 38% respectively this year, while shares of Apple are up just 5%. Apple has lots of cash and will continue to pay a dividend, currently yielding 1.8%.
But that's kind of the point. Apple is morphing from a growth stock to a piggy bank. Seeing Apple become more staid is not necessarily a bad thing. Many steady-and-dependable blue chip stocks deliver solid returns to investors over the long-term. But Apple's sheer size and dependance on the now mature smartphone market - at least in the developed world - shows it's a different stock. Apple shares will behave differently than when the company was smaller and had something to prove.
Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.