Should I buy Apple shares for my ISA in February?

Apple (NASDAQ: AAPL) stock has marched 71% higher in a little over over two years, giving the iPhone maker a mammoth $3.35trn market cap. With the US bull market in full swing, it seems just a matter of time before it becomes a $4trn business. So, should I add Apple to my Stock and Shares ISA? Let’s dig in.

A bruised Apple in China

Weighing up the investment case, I have a few concerns. The first is that the iPhone is rapidly losing traction in China, its biggest market outside the US. According to data from Counterpoint Research, sales there were down 18.2% in the December quarter.

Now, we know that China’s economy is struggling and consumer spending is weak. So falling sales aren’t too much of a surprise. However, the report says that China’s Huawei was the number one smartphone seller last year, pushing Apple down to third place.

Why might that be? Well, beyond generally charging higher prices, the US firm has been late to the party when it comes to rolling out artificial intelligence (AI) features in China. It’s still in talks with Tencent, Baidu, and TikTok owner ByteDance about integrating their AI models — already approved by regulators — into iPhones.

But Apple will need to get its skates on. Consumers in the world’s second-largest economy are unlikely to opt for one of its new phones when domestic rivals are already offering the latest AI-powered features.

In the West, there’s also evidence that consumers haven’t been wowed by its recent ChatGPT-powered offerings. Therefore, the massive AI-driven smartphone upgrade cycle that many analysts were predicting hasn’t started yet.

Meanwhile, some continue to question Apple’s record on product innovation.

[Apple hasn’t] invented anything great in a while. It’s like Steve Jobs invented the iPhone, and now they’re just kind of sitting on it 20 years later.”

Meta Platforms CEO Mark Zuckerberg on the Joe Rogan podcast, January 2025.

High valuation

Another concern I have is slowing revenue growth. Again, this is hardly surprising given Apple’s colossal size. But in its fiscal 2024 period, which ended in September, revenue only grew 2% year on year.

And while adjusted earnings rose faster, the firm’s growth is still noticeably slower than Big Tech peers like Amazon, Microsoft, and Google parent Alphabet.

Yet Apple stock is trading for a high price-to-earnings (P/E) multiple of 33. That valuation doesn’t strike me as attractive.

The world’s best investors are jumping ship

The final worry I have here is that top investors have been selling the stock. The highest-profile of these is Warren Buffett, who has cut his gigantic Apple stake by around two-thirds over the past year.

Other notable sellers lately include billionaire fund managers Steven Cohen, Israel Englander, and Terry Smith. Slowing growth and a high valuation could be factors that influenced their decisions.

My move

Of course, it goes without saying that this is a wonderful company. There are around 2.2bn active Apple devices worldwide, and its services division that houses the App store, iCloud, Apple Music, Apple Pay, and more is growing double digits.

Personally, I can’t ever imagine switching from an iPhone, while I’m also now an Apple Music subscriber. However, despite being a very satisfied long-term customer, I’m not interested in investing in the shares right now.

The post Should I buy Apple shares for my ISA in February? appeared first on The Motley Fool UK.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.