2 Glorious Growth Stocks Down 28% and 73% You'll Wish You'd Bought on the Dip, According to Wall Street

Apple Inc. (AAPL) and Microsoft Corporation (MSFT) have experienced significant stock price declines of 28% and 73%, respectively, despite their strong financial performances. Apple's revenue growth of 0.061 and Microsoft's revenue growth of 0.16 indicate that their businesses are still thriving. The decline in Apple's stock price can be attributed to its high valuation, with a P/E ratio of 41.9852, which may have made it less attractive to investors. Microsoft's stock price decline may be due to its lower growth rate compared to other tech companies, as well as its high valuation, with a P/E ratio of 35.971073. Despite these declines, both companies remain strong investment opportunities due to their dominant market positions and continued growth.

Market sentiment and investor perceptions have significantly impacted the stocks' substantial drops. The 'Trump trade' hypothesis suggests that investors are betting on a Trump victory, driving up bank stocks, cryptocurrencies, and Trump Media & Technology Group shares. However, alternative explanations, such as better-than-expected bank earnings and the volatile nature of Trump Media & Technology Group's stock, indicate that these market movements may not solely be attributed to election sentiment.

Geopolitical factors and regulatory changes have significantly impacted the operations and stock prices of the two companies. For Apple, the U.S.-China trade war and tariffs have led to supply chain disruptions and increased production costs, contributing to a 28% decline in its stock price. Additionally, regulatory changes in China, such as the crackdown on data privacy and anti-monopoly measures, have negatively affected Apple's sales and market share in the region. For Microsoft, geopolitical tensions and regulatory scrutiny, particularly around antitrust concerns, have led to fluctuations in its stock price. The company's involvement in cloud computing and artificial intelligence has also drawn attention from regulators, impacting its operations and stock performance.

Analysts expect Apple's (AAPL) recovery to be driven by its AI integration, with the Apple Intelligence platform set to deliver new features like generative text and images, and an advanced Siri voice assistant. This, along with a resilient macroeconomic backdrop, is projected to boost revenue growth to 6% in 2025, with EPS increasing by 21.5%. Microsoft (MSFT), meanwhile, is expected to benefit from its strong position in cloud services and AI, with analysts predicting a 16% revenue growth and a 14.95 EPS in 2025.

Despite recent declines, analysts remain bullish on Apple Inc. (AAPL) and Microsoft Corporation (MSFT), with strong fundamentals and long-term prospects justifying their recommendations. Apple's market cap of $3.9 trillion and Microsoft's $3.2 trillion reflect their dominance in technology. Both companies have robust cash positions ($65.2 billion for Apple and $78.4 billion for Microsoft) and strong free cash flows ($110.8 billion for Apple and $61.3 billion for Microsoft), indicating solid financial health. Their earnings growth and forward P/E ratios (30.7 for Apple and 29.0 for Microsoft) suggest continued profitability. Additionally, both companies have strong analyst recommendations (buy for Apple and strong_buy for Microsoft), with 42 and 48 analysts, respectively, supporting their bullish outlooks.

Analysts have set price targets for Apple and Microsoft at $275 and $500, respectively, indicating potential upside of 15% and 14% from their current discounted prices. The expected returns for Apple and Microsoft are 12% and 11%, respectively, suggesting that these stocks may still offer attractive growth opportunities despite their recent declines.