Is Apple Inc. (AAPL) the Debt Free Halal Stock to Invest in Right Now?
March 31, 2025
We recently published a list of 10 Debt Free Halal Stocks to Invest in Right Now. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against other debt free halal stocks to invest in right now.
The current economic conditions with elevated interest rates have made debt-free stocks increasingly valuable to investors. Companies without debt responsibilities avoid spending their funds on interest costs from loans or different types of borrowing. Due to their enhanced financial flexibility, corporate funds can be directed toward research and development, strategic growth projects, and business expansion initiatives that boost long-term business worth. Debt-free flexibility stands as an essential factor because high interest rates create better business models and financial results that matter during recessions.
Low-debt stocks experience lower price volatility in challenging economic circumstances. Economic slowdowns, together with inflationary pressures, bring about elevated interest rates that result in market instability and increased investor concern. Companies without debt stand as more secure financial investments since they encounter a reduced probability of financial problems or bankruptcy. A turbulent market can find potential protection from negative effects through investing in shares with minimal debt which provides stability to uneasy investors.
Investors who buy debt-free stocks receive the advantage of potentially better dividend payments at times when interest rates are elevated. Companies with robust cash reserves together with no debt hold better chances of allocating dividends to investors. The market value of debt-free stocks tends to be higher when interest rates are elevated.
Jeffrey Gundlach shared his thoughts on market reactions to the Federal Reserve’s recent meeting through his CNBC interview on January 30. Gundlach explained that the Fed declared no rush in interest rate suppression but investors interpreted it as moderate hawkishness. He stated the federal funds rate aligns perfectly with the two-year Treasury yield showing that the Fed maintains its current financial policy in response to economic conditions. Gundlach expressed skepticism about data-driven Federal Reserve policy because it potentially creates short-term monetary choices.
He further observed unique market patterns after the Federal Reserve made its first interest rate reduction in September. Gundlach believes bond prices ascended after rate reductions but this situation features two-year Treasury yields increasing by 60 basis points together with ten-year Treasury yields growing by 85 basis points. The bond market displays unexpected behavior after Federal Reserve policy changes because investors observe both this market pattern and falling long bond ETF values. According to Gundlach, the ongoing Federal Reserve pause signifies market stability because they need more evidence before making decisions.
In addition, Gundlach noted that the stock market faces difficulties due to the broader index’s CAPE ratio of around 35. His comparison between the present CAPE ratio and the ratio that stood at 10 during Ronald Reagan’s time shows that future value expansion is quite limited. Profitability stands as the chief determinant to boost stock market performance rather than multiple business expansions.
With interest rates unlikely to decline soon, debt-free stocks remain attractive for their stability, resilience, and strong financial positioning.
To compile this list, we chose the top 10 stocks from the S&P Shariah ETF, which includes all Shariah-compliant constituents of the broader index. After this, we compared their market caps with their enterprise value to gauge which ones are debt-free. The companies listed below may not be entirely debt-free, but they maintain a solid financial standing with low net debt and substantial cash reserves, ensuring they can comfortably meet their debt obligations. From that list, we picked 10 companies with the highest number of hedge funds having stakes in them, as per Insider Monkey’s database of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A wide view of an Apple store, showing the range of products the company offers.
Number of Hedge Fund Holders: 166
Market Cap as of March 27: $3.363 trillion
Enterprise Value as of March 27: $3.32 trillion
Apple Inc. (NASDAQ:AAPL) produces a diverse range of innovative products, including the iPhone, iPad, Mac computers, Apple Watch, and Apple TV. The company also delivers the iOS and macOS operating systems, along with iCloud services, advertising features, payment services, Apple Music access, and the App Store.
The delay of essential Siri virtual assistant features has led to a decline in Apple Inc. (NASDAQ:AAPL)’s stock shares. According to Bloomberg, quality issues have caused delays, with assessments indicating that the technology experiences malfunction rates exceeding 80%. Since June 2024, several features initially planned for release in April with iOS 18.4 have been postponed. The company aims to resolve these technical issues by 2026, but the extended wait period has raised concerns among investors about the company’s competitiveness in artificial intelligence development. In the current market, the stock value has dropped approximately 15% since the initial announcement.
According to Erik Woodring from Morgan Stanley, the postponement could potentially weaken upcoming iPhone product upgrades for 2024. The analyst has lowered his iPhone shipment projections for 2025 and 2026 by 1% to 5%. While other features may drive unit growth, he remains skeptical about the impact of AI features. The absence of a revolutionary AI application could hinder substantial upgrade rate increases unless such features are introduced before the release of the iPhone 17. Despite maintaining an Overweight rating on the stock, Woodring has reduced his price target from $275 to $252. This revised target reflects strong market potential for Apple Inc. (NASDAQ:AAPL), although it remains close to the $255 consensus average target.
Overall, AAPL ranks 6th on our list of debt free halal stocks to invest in right now. While we acknowledge the potential of AAPL, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Terms and Privacy Policy
Search
RECENT PRESS RELEASES
Related Post
