Market Meltdown: 1 Screaming Buy Down 50% Hasn't Been This Cheap in 5 Years

The market meltdown of 2025 has left investors reeling, with the Dow Jones Industrial Average tumbling 5.5% on Friday, marking its biggest weekly decline since the early days of the Covid pandemic in March 2020. The S&P 500 and Nasdaq Composite also posted significant losses, with the tech-heavy Nasdaq entering bear market territory. The catalyst for this sell-off? President Donald Trump's announcement of sweeping tariffs on U.S. trading partners, which has sparked fears of a global trade war and economic recession.

Among the hardest-hit stocks is Apple (AAPL), which has seen its share price plummet by 50% over the past year. The tech giant, which relies heavily on international supply chains, has been particularly vulnerable to the tariff announcements. On April 4, 2025, Apple's stock sank 9.3%, shedding over $310 billion in market value from market close on Wednesday to market close on Thursday. This decline was part of a broader market trend where companies that rely on international supply chains were leading the U.S. markets lower. For instance, Nike (NKE) tumbled 14.4%, Best Buy (BBY) plunged 17.8%, and Ralph Lauren (RL) tanked 16.3%.

The broader market trends and economic conditions as of April 2025 were characterized by severe market rattling due to Trump's tariff announcement. Global markets also fell sharply, with Europe’s benchmark STOXX 600 index tumbling 2.57%, Germany’s DAX index falling 3%, France’s benchmark index slumping 3.31%, and Italy’s benchmark index slumping 3.6%. In Asia, Japan’s Nikkei 225 index sank 2.77% and Hong Kong’s benchmark Hang Seng index fell 1.52%.

The significant declines in the stock market were driven by fears that the new tariff policies could trigger significant backlash from trading partners and take down the global economy. This led to a 39.6% surge in the Cboe Volatility Index (VIX), indicating "extreme fear" among investors. The Fear and Greed Index also slumped to its lowest level this year as tariff anxiety gripped investors.

The economic conditions were further exacerbated by the fact that the US dollar fell to its weakest level since October on Thursday, wiping out its gains since Trump’s reelection in November. This was despite the fact that tariffs in theory should boost the dollar. However, investors’ concerns that the United States was creating a self-inflicted wound that would stymie its long-term growth sent the dollar sinking against other global currencies.

Despite the dire market conditions, there are reasons to believe that Apple's stock could be a screaming buy at its current valuation. The company's current forward price-to-earnings (P/E) multiple is less than 9, a significant discount compared to its historical valuations. Historically, Apple's P/E ratio has been higher, reflecting investor confidence in the company's growth prospects. The current P/E ratio suggests that investors are doubtful about Apple's future growth strategy, particularly in light of upcoming patent expirations on multiple drugs, including Eliquis, Vyndaqel, Xeljanz, Ibrance, and Xtandi. These patent expirations could result in an $18 billion hit to its top line before the end of the decade.

Comparing Apple's current valuation to its peers, we see that it is trading at a similar forward P/E multiple of 9, which is also heavily discounted. For example, Comcast (CMCSA) is trading at a forward P/E of 9, despite having strong fundamentals and potential catalysts such as the spinoff of some of its cable networks and the launch of a new theme park in Florida.

The insights drawn from this comparison suggest that Apple's current valuation presents a potential opportunity for recovery and future growth. The significant discount in its P/E ratio indicates that the market may be overreacting to the company's near-term challenges. Apple's management has been proactive in acquiring other healthcare businesses and expanding its pipeline to bolster its growth prospects. For instance, Apple acquired Seagen, an oncology company, for $43 billion in 2023. This acquisition, along with the company's efforts to develop new drugs, could help mitigate the impact of patent expirations and drive future growth.

In conclusion, Apple's current valuation, given its 50% price drop, is significantly discounted compared to its historical valuations and those of its peers. This presents a potential opportunity for recovery and future growth, as the market may be overreacting to the company's near-term challenges. Investors who are willing to buy at the current discounted price and hold for the long term may be rewarded with good returns as the company's growth strategy pays off.