In March 2015, analysts at Cantor Fitzgerald said that Apple Inc. (NASDAQ:AAPL) could soon be valued at more than $1 trillion. According to World Bank Statistics, this would make the tech-giant more valuable than the gross domestic product of Saudi Arabia and worth 2.6 times as much as Google, now a part of Alphabet Inc. (NASDAQ:GOOGL), its closest competitor.
Since then – and after the unveiling of the new iPhones – Apple’s shares have actually fallen by 4% and continue to underperform. While this could actually do Apple a favour, it also enables other companies to make up lost ground.
So, who should Apple be keeping an eye on in 2016? Is it even worth buying up the shares of industry rivals or do other investment opportunities such as CFD and Forex trading through providers like IG provide more sustainability?
Apple’s undulating share price
Compared to the heady heights of early 2015, Apple’s current share price is nothing unusual when compared to previous years. Immediately after past product launches, Apple’s stock has gone down due to inflated expectations.
However, this works to Apple’s advantage, as it will be easier to meet market estimates by the end of the year, which is what happened with the iPhone 6 in 2014. What’s more, the less investors expect from Apple, the more happy they will be from surprisingly strong sales.
But there is every chance that hype could soon work against Apple, especially if analysts get carried away. For this reason, some tech investors are looking at other alternatives in the sector, which provide equally lucrative opportunities.
Tech investment opportunities aside from Apple
Even though few companies come close to Apple’s sky-high valuation, there are still ample investment opportunities elsewhere in the tech sector. For quite some time, the three companies that stood the best chance of eating into its market share were:
- Samsung – Apple’s biggest competitor from a smartphone and tablet perspective. The Korean smartphone giant launched Galaxy S6 Edge, which was highly acclaimed by reviewers and users. Excited from the market response, the company is reportedly ready to launch the predecessor Samsung Galaxy S6 Edge+ soon.
- Google – Several products and services are now in direct competition with Apple’s software and operating systems. After the recent reorganisation, the company is aiming to acquire few well-known products.
- Microsoft – Apple’s long-established enemy has taken a hit from the declining PC market but remains a big rival. The recently held Windows 10 devices event has already established the purpose behind the aggressive approach to the market and flooding it with a fleet of new smartphones and other devices.
These companies could make up ground on Apple over the next 12-18 months, but there are other tech choices that could reach even higher levels of success in 2016.
- Amazon – Its large-scale infrastructure coupled with a wide range of products helps to attract and retain customers. New areas of expansion like smartphones and tablets as well as product innovations such as Amazon Prime give this online retailer a platform to challenge Apple on.
- Facebook – The world’s social network boasts unrivalled scale and amazing growth from its extensive online platform. Strong earnings, mobile dominance and the acquisition of well-established tech brands including Instagram and WhatsApp mean Facebook’s potential is substantial.
Knowing when and where to invest in tech
Regardless of the company you choose to invest in, bear in mind that tech stocks have historically thrived in Q4. However, previous performance should never be gospel for investors, so make sure you or your financial adviser/broker has an in-depth understanding of the market.
It also makes sense to diversify your portfolio to mitigate risk. This means choosing a wide range of investment products such as bonds and property as well as CFD and Forex trading. Don’t put all of your Apples in one basket…