Take a Bite of This Stock

The stock market’s plunge has left many investors reeling, but for those with some cash and a long-term mindset, it’s a great opportunity to buy. Consider Apple (Nasdaq: AAPL). While it’s likely to see a sales slump due to production challenges and store closures related to the coronavirus, its future is far from bleak. The iPhone maker has built a formidable business that isn’t highly dependent on product sales: services, which can help offset losses that Apple’s hardware business takes from the coronavirus crisis. Including revenue from the App Store, Apple Music, Apple Pay, iCloud, AppleCare, Apple TV+ and other services, Apple’s services segment recently accounted for about 14% of total revenue and sported a much fatter profit margin. In Apple’s most recent quarter, services revenue increased 17% yearover-year, with record performance in cloud services, music, payments, the App Store and AppleCare. Also impressive is its growth in subscriptions across its own native apps and third-party apps: Apple’s paid subscriptions totaled 480 million at the end of its first quarter of fiscal 2020, up 33% year-over-year. Importantly, this services business is supported by an installed base of 1.5 billion active devices (up 100 million from the year-ago quarter) — and these users will continue to spend money on services amid the coronavirus pandemic. (The Motley Fool owns shares of and has recommended Apple.)