We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. Learn more.

Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.

Close up of a smart phone with Apple Stock Market and the buttons  Buy  or  Sell
Money; Getty Images

Not so long ago, diehard Apple fanatics would camp to be first in line to buy the company’s latest iPhone, among other products. These days, many people are more keen to buy shares of Apple, and it’s consistently among the most-held stocks for Robinhood customers.

Apple’s appeal to investors makes sense given its popularity with consumers. The iPhone debuted in 2007 and there are now more than 1 billion active iPhones around the world. As the Cupertino, California-based tech giant has rolled out one new gadget after another — including the iPod, iPhone, iPad, Airpods, Apple Watch, and MacBook — it has also dominated the stock market. Apple stock has delivered total returns (assuming dividends are reinvested) of nearly 7,000% in the past 15 years, the fourth-best performer in the S&P 500 Index during that time.

Since launching its initial public offering (IPO) in 1980 at $22 a share, Apple has completed five stock splits, most recently in 2020. These splits help keep Apple’s stock price within reach for many investors. Still, the decision to buy Apple shares could take a bite out of your investment budget, so here’s how to evaluate if the stock deserves to hang around your portfolio.

Apple stock (AAPL) fundamentals

For millions of Americans, at least one Apple product is integral for getting through the day. On Wall Street, Apple does a lot of the heavy lifting in the broader stock market. The company is the largest component of the S&P 500 Index, meaning that its performance has a bigger effect on the index’s day-to-day moves than more than 100 of the index’s smallest members, combined.

Apple also is a member of the smaller and more exclusive Dow Jones Industrial Average, which it joined in 2015, and the tech heavy Nasdaq 100 index. The stock is listed on the Nasdaq stock exchange under the ticker AAPL, and is grouped in the information technology sector alongside the likes of Microsoft, Nvidia, and Visa.

To evaluate Apple as an investment opportunity, it’s important to understand the company’s financials. You can easily access earnings reports through Apple’s website, and in documents the company files with the U.S. Securities and Exchange Commission (SEC). You’ll be able to review Apple’s business, including information about its source of revenue and profit.

Finally, you’ll need to understand how Apple’s stock trades. It’s among the most active on Wall Street, with millions of shares trading each day, and is slightly more volatile than the market as a whole. You can also find key information about the stock on a variety of financial websites, including its historical performance, dividend, valuation, and price-to-earnings ratio. You should also review news about the company, its competitors, and review reports written by Wall Street analysts that detail Apple’s business and industry trends that will affect the stock price.

Apple’s latest financial results

Because Apple pulls so much weight in the U.S. stock market, it can be one of the best stocks to track, even for non-investors. And Wall Street certainly keeps close tabs on the tech giant’s every move. In the company’s fourth quarter, Apple reported a record $83.4 billion in revenue, a 29% increase from a year ago. The company delivered earnings per share of $1.24, up from $0.73 in the same quarter in 2020.

During the quarter, net sales of Mac and iPad products, wearables (including Airpods and the Apple Watch), home items (like the Apple TV and HomePod) and accessories all exceeded net sales from the same quarter in 2020. iPhone sales were up 47% year-over-year.

Even so, the earnings were lower than expected. Apple shares slumped immediately after the company reported quarterly results. CEO Tim Cook said supply chain constraints cost the company $6 billion in sales this quarter. The impact will be even worse the next quarter, but the company still expects year-over-year revenue growth, he added.

How Apple stock fits into your portfolio

Apple occupies a rare trifecta: It’s a member of the three primary benchmarks for large-cap U.S. stocks: the S&P 500, the Dow Jones average, and the Nasdaq 100. As a result, you probably are invested in Apple if you own any index funds that track these indexes. Furthermore, Apple is among the top 15 holdings in more than 230 different exchange-traded funds (ETFs).

If you’re contemplating whether to buy Apple stock, it’s important to first consider your portfolio’s existing exposure to this one stock. If you add more Apple to your portfolio, you could be at-risk if Apple’s performance stumbles, as it has in the past. What’s more, you may miss out on diversification benefits of investing in a variety of other stocks. Before making any major changes to your portfolio — be it Apple-related or otherwise — you may want to seek out investment advice from a financial advisor.

Finally, be mindful that the stock’s past performance may not repeat. For example, in three of the seven years from 2014 through 2020, Apple’s returns lagged behind the S&P 500’s — and it’s lagging behind the index once again this year. What’s more, Apple’s stock has experienced some steep slumps, including bear markets of declines in excess of 20%.

How to buy Apple stock in a brokerage account

Some diehard Apple fans won’t be appeased with investing in Apple by buying a mutual fund or ETF. If that’s you, the good news is that it’s very easy to buy Apple stock, provided you have an account set up with an online brokerage firm. The two main ways you can buy Apple shares is by placing a market order, which will be executed as soon as possible at the current market price, or a limit order, which lets you specify the maximum price you are willing to pay.

Deciding how many Apple shares to buy is likely to be a bigger decision. Since its latest split in 2020, the stock has been trading in the range of about $100 to $150 a share. If you have a smaller budget, you may be able to buy fractional shares through your online broker. Because Apple pays a dividend, you can increase your allocation over time by reinvesting those dividends.

While Apple is understandably attractive given the company’s popularity, consider your motivation for buying the stock. After all, you may already benefit from Apple’s performance via index funds without realizing it. And because individual stocks can be volatile, you should limit your exposure to avoid the risks of having all (or most) of your eggs in one basket.

If you’re relatively new to investing, focus instead on building a well-diversified portfolio that includes stocks, bonds, funds, and alternative assets. Also make sure money you want to invest in the market doesn’t have a more fruitful purpose, such as padding an emergency fund that could cover at least three months of expenses or paying off high interest debt (like credit cards).

Finally, remember that the market’s sweetest success stories can sour. Consumers are notoriously fickle, and another company could come along to challenge Apple in the future. Rather than focusing on picking the flashiest stocks at any given time, a proven long-term strategy is to invest in the market itself.

More from Money:

Robinhood for Beginners: A Complete Guide to Investing With the Controversial Stocks App

How to Buy Stocks

How to Buy Gold in 2021