Apple stock split: Do you need to buy or wait now?

The split follows an enormous milestone for the iPhone maker – last week Apple’s market cap went above $ 2 trillion. In the next few days, that number continued to climb to about $ 2.16 trillion on Monday, making it Call (AAPL) the most valuable stock in history after passing Saudi Aramco’s record $ 2.03 trillion market cap peak, which it reached in December.

Apple’s stock split process begins today after the closing clock. The company will create a record of current shareholders whose shares will be split. Current investors will receive their additional shares after the closing clock on August 28, and shares will start on August 31 with the new, split-adjusted price.

Buy before or after the split?

Here’s an example: Assuming that stock prices do not move dramatically during the multi-day split process, if an investor owns two Apple shares at $ 500 each before the split (a total of $ 1000), they will move to Apple after the split. shares have at $ 125 each (still a total hold of $ 1000).

As of Monday afternoon, Apple shares were trading at around $ 505.

This is Apple’s fifth stock since it went public. And previous splits have been a hit with investors.

Can Apple continue to grow?

Apple is already a behemoth, but many Wall Street analysts expect it to continue its dramatic growth.

“We believe that iPhone 12 represents the most important product cycle for (Apple CEO Tim) Cook & Co. since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story that looks ahead,” said Dan Ives, analyst at Wedbush Securites, in an investor note earlier this month.

The improved connectivity of 5G could also lead to greater adoption and use of Apple’s digital services, such as Apple Arcade and Apple TV +, making the company increasingly demanding to diversify sales.

While expectations are high for the new releases, older and cheaper iPhones may also play a major role in Apple’s future, according to Morgan Stanley analyst Katy Huberty.

The company’s iPhone app provides it with used devices that can be resold, typically in emerging markets for a fraction of the price of new iPhones. In those markets, Huberty said, Apple holds a much smaller share of the market share than its positions in global and developed markets – meaning it has significant room for growth.

Between the lower price iPhone SE and the upcoming 5G iPhone, existing owners of Apple devices have growing incentives to upgrade old devices, to grow the trade-in program.

Currently, Apple holds 8% market share in emerging markets, compared to 35% share in development markets and 15% overall world share. But by 2023, Huberty said it expects about 70% of Apple consumers to participate in the trading program, which could boost Apple’s emerging market share to 15%, and its overall global share of 21% in that period.

That would mean a larger installed user base for Apple, and probably more consumers of its digital services and other hardware products, such as AirPods.

“Apple’s used iPhone opportunity and the base growth installed as a result will help the company improve long-term growth,” Huberty wrote in an investor note last week.

So, what does all this mean for potential Apple investors?

If you can afford it now, analysts think an investment in Apple will continue to pay off.

If not, Apple shares will be cheaper in a week and you can get in on it.