Is buying Apple stock a once-in-a-lifetime opportunity to get rich?

Apple (NASDAQ: AAPL ) stock has been one of the best stocks to make monumental gains in years — and Warren Buffett would be happy to second it. So, can blue-chip stocks still deliver on their success and give them the opportunity to grow their wealth exponentially for years to come?

The fruits are back

With a return of almost 900%, Apple’s 10-year return easily trumps it S&P 500 by a huge margin. Therefore, it is not surprising to see Berkshire Hathaway having Apple shares as the largest holding.

It’s not a coincidence. The Cupertino-based company is known for its many strong attributes. These include a deep economic moat, strong pricing power, high margins, and good management – ​​all of which result in high returns on assets (27%), equity (54%), and working capital (156%).

Make a blockbuster move

However, this has not stopped bears from expressing concern about Apple’s future growth potential. The company’s latest earnings show that growth is starting to taper off, with critics pointing to supply chain problems and a lack of innovation in new products.

All of these are valid concerns. Even so, it goes without saying that Apple stock still has the potential to increase in value.

For one, service revenues are expected to continue to grow despite the recent downturn. This will be the best source of income for the tech giant due to its high profit margin (66%). And with over 2bn active devices and growing, recurring revenue should increase as the economy improves.

Another big catalyst for Apple stock is its investment in entertainment. The group plans to invest $1 billion to produce box office films, and may also buy streaming rights for the Premier League.

What’s more, there are various next-generation products waiting to be launched. This could be the next catalyst for the revenue explosion. These products include the long-awaited VR headset, a foldable phone, and even an improved Apple Watch with non-intrusive diabetes tracking capabilities.

What’s next for Apple stock?

Having said that, it’s worth noting that Apple’s stock is up 25% this year. Therefore, I think the stock will float at current levels until macroeconomic conditions start to improve. However, the conglomerate still has bright long-term prospects.

As dominant as Apple is, it is easy to forget that it only commands 24% of the smartphone market. This means there is still plenty of room to continue to hold market share. So, Apple remains a great investment in my book and certainly has the potential to increase my wealth significantly.

The balance sheet may appear impoverished with debt exceeding the level of cash. However, the company’s strong free cash flow gives management the opportunity to take on debt without worry.

That said, Apple stock isn’t cheap, as its current multiple is higher than the industry average and the index. After all, Warren Buffett is known to buy stocks when they trade at 20 times earnings, and sell part of the stocks when they reach above 25.

Metric	Apple	Industry average
Price-to-earnings (P/E) ratio.	26.3	15.1
Price-to-earnings ratio (FP/E).	25.7	33.4

A rich broker Goldman Sachs, Morgan Stanleyand JP Morgan may have a ‘buy’ rating on the stock, but given its average target price of $168, there is little room for growth in the short term. Therefore, I will hold my position for now.