Active mutual funds struggle to beat large-cap stock benchmarks — again
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 07 2025
0mins
Should l Buy AAPL?
Source: MarketWatch
Performance of Active Funds: In 2024, only 36% of actively managed U.S. large-cap mutual funds outperformed their Russell 1000 benchmarks, marking the lowest success rate since 2020.
Historical Context: This performance aligns with the long-term average for active fund managers since 2003, as reported by BofA Global Research.
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Analyst Views on AAPL
Wall Street analysts forecast AAPL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AAPL is 299.69 USD with a low forecast of 230.00 USD and a high forecast of 350.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
32 Analyst Rating
19 Buy
11 Hold
2 Sell
Moderate Buy
Current: 274.620
Low
230.00
Averages
299.69
High
350.00
Current: 274.620
Low
230.00
Averages
299.69
High
350.00
About AAPL
Apple Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. Its product categories include iPhone, Mac, iPad, and Wearables, Home and Accessories. Its software platforms include iOS, iPadOS, macOS, watchOS, visionOS, and tvOS. Its services include advertising, AppleCare, cloud services, digital content and payment services. The Company operates various platforms, including the App Store, that allow customers to discover and download applications and digital content, such as books, music, video, games and podcasts. It also offers digital content through subscription-based services, including Apple Arcade, Apple Fitness+, Apple Music, Apple News+, and Apple TV+. Its products include iPhone 16 Pro, iPhone 16, iPhone 15, iPhone 14, iPhone SE, MacBook Air, MacBook Pro, iMac, Mac mini, Mac Studio, Mac Pro, iPad Pro, iPad Air, AirPods, AirPods Pro, AirPods Max, Apple TV, Apple Vision Pro and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Innovation-Driven Products: The iPhone accounted for 59% of Apple's revenue in Q1 FY2026, while other products like the MacBook, iPad, and AirPods also performed well, further solidifying Apple's leadership position in the global market.
- Earnings Growth Expectations: Apple's latest financial results show a 16% increase in revenue and an 18% rise in diluted earnings per share (EPS), with analysts projecting an annual EPS growth of 11.5% from FY2025 to FY2028, providing confidence to investors.
- Stable Market Valuation: With a price-to-earnings ratio of 34.9, Apple's stock is expected to continue rising if this valuation remains stable, although concerns about its position in the age of artificial intelligence could affect investor sentiment; nonetheless, the overall outlook remains optimistic.
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- Remarkable Historical Returns: Over the past 20 years, Apple's stock has surged by 10,650%, with a total return of 12,730% including reinvested dividends, highlighting its strong performance and investment appeal in the consumer tech sector.
- Innovation-Driven Products: The iPhone accounted for 59% of Apple's revenue in Q1 FY2026, while other products like the MacBook, iPad, and AirPods also performed well, further solidifying Apple's leadership position in the global market.
- Earnings Growth Expectations: Apple's latest financial results show a 16% increase in revenue and an 18% rise in diluted earnings per share (EPS), with analysts projecting an annual EPS growth of 11.5% from FY2025 to FY2028, providing confidence to investors.
- Stable Market Valuation: With a price-to-earnings ratio of 34.9, Apple's stock is expected to continue rising if this valuation remains stable, although concerns about its position in the age of artificial intelligence could affect investor sentiment; nonetheless, the overall outlook remains optimistic.
See More
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- Increased Capital Expenditure: The rising capital expenditures among tech giants like Apple, Microsoft, and Amazon signal heightened risks for investors, with Mark Hawtin from Liontrust suggesting this trend may lead to underperformance relative to the broader market.
- Amazon's Cash Flow Challenge: Amazon is projected to generate $60 billion in cash flow this year, but with capital expenditures rising correspondingly, it will end up with no free cash flow after CapEx, illustrating the tough trade-off between immediate returns and long-term investments.
- Heightened Uncertainty: Hawtin argues that the increased capital intensity fundamentally alters how these companies should be valued, as investors are uneasy about the unpredictability of future performance, particularly given the disconnect between AI spending and revenue generation.
- Importance of Data Assets: Hawtin highlights that companies with unique data will emerge as winners in the AI race, citing Alphabet's strong performance last year due to its vast proprietary datasets, underscoring the critical role of data assets in future profitability.
See More
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- Money Flow Analysis: In early trading, positive money flows were observed in Amazon, Microsoft, Nvidia, and Tesla, indicating investor confidence in these tech giants, which could further drive their stock prices upward.
- Market Concentration Issues: Most portfolios are now heavily concentrated in the 'Magnificent Seven' stocks, which may lead to increased market volatility, prompting investors to be mindful of potential risks and reward balances.
- Bitcoin Trading Status: Bitcoin is currently trading below $70,000, failing to maintain this psychological support level, which is disappointing for bullish investors and may affect overall market sentiment.
- Investment Strategy Recommendations: Investors are advised to continue holding long-term quality assets while adding tactical positions based on market signals to navigate the current uncertainty and volatility.
See More
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- Sales Performance Exceeds Expectations: Ferrari reported a 4.0% year-over-year sales growth to $2.098 billion (1.80 billion euros), surpassing analyst expectations of $2.020 billion, indicating strong market demand and brand appeal.
- Profitability Improvement: Adjusted EBITDA rose 8.9% year-over-year to 700 million euros, with margins expanding by 181 basis points to 38.85%, reflecting the company's success in cost control and product mix optimization.
- Strong Cash Flow: Operating cash flow totaled 519 million euros, with free cash flow at 269 million euros, demonstrating robust financial management, while Ferrari held 1.47 billion euros in cash and equivalents as of December 31, 2025.
- Optimistic Future Outlook: EPS for fiscal 2026 is projected to exceed $11.00, with revenue expected to surpass $8.73 billion, both above market expectations, indicating Ferrari's continued growth potential in the luxury automotive market.
See More
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- Dow Performance: The Dow reached a new record on Tuesday, marking three consecutive days of intraday highs, reflecting strong market momentum, particularly with positive movements in AI infrastructure stocks boosting investor confidence.
- Stock Highlights: Corning's stock rose about 7% since Friday's close, hitting an all-time intraday high in the previous session despite a slight decline on Tuesday, indicating optimistic market expectations for its future growth.
- Texas Roadhouse Downgrade: Truist downgraded Texas Roadhouse to a hold equivalent and lowered its price target from $206 to $188, with analysts expecting beef price inflation to persist through 2027; however, the investing club remains cautiously optimistic about the stock.
- TSMC Sales Growth: Taiwan Semiconductor reported a 37% year-over-year increase in January sales, significantly accelerating from 20% growth in December, signaling strong AI demand and positively impacting portfolio names like Nvidia, Broadcom, and Apple.
See More
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- Chip Stock Focus: With Taiwan Semi reporting a 37% year-over-year sales increase, attention on chip stocks like Nvidia and Broadcom is rising, indicating a robust rebound in artificial intelligence demand that could drive stock performance.
- DuPont Earnings Beat: DuPont's fourth-quarter net sales, EBITDA, and adjusted EPS exceeded expectations, with adjusted EPS ranging from $2.25 to $2.30 compared to the consensus of $2.14, while management's 2026 outlook also surpassed market expectations, highlighting the company's strong growth potential.
- CVS Strong Quarter but Stock Drops: CVS reported an adjusted EPS of $1.09 for the fourth quarter, beating expectations of $0.99; however, the stock fell over 2% due to the full-year EPS midpoint being below market estimates, reflecting concerns about future profitability.
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