Ever wonder how the release of a new gadget, like the Apple Vision Pro, can shake up the world of stocks and investments? Well, you’re not alone.
For those of you new to investing, it can be a bit like a game of dominoes. When a big technology sector company like Apple introduces something new and exciting, it often leads to explosive growth.
When Apple Announces New Product, Stock Prices Rise
Think back to the release of the first iPhone on June 29, 2007, which saw eager customers camping outside stores overnight for the chance to buy it.
Fun fact: from the year of its release, Apple’s stock price has increased by an annualized 29.4%. That is nearly three times that of the S&P 500 Index which has only returned an annualized 8.9%.
Clearly, the customer loyalty and devotion Apple cultivated with other products like Apple TV, the Apple Card, the Apple Watch, the iPad, AirPods, AirTags has paid off for the company and investors. The dynamic and hype around new Apple launches can create some great opportunities for those investors who know where to look.
In this article, we’ll break down the buzz around the new Apple Vision Pro and go over how U.S. technology sector stocks could be winners in the aftermath.
So, whether you’re an investing newbie or just looking to understand the market a bit better, let’s dive into the fascinating world of tech stocks stirred by Apple’s newest release.
What is Apple Vision Pro?
The Apple Vision Pro is described by the company as a “spatial computer.” That is, it’s an augmented/virtual reality (AR/VR) headset device that users can control with their eyes, hands, and voice. Whereas a regular computer is limited to the screen in front of you, the Apple Vision Pro uses your surroundings as its screen.
Apple Vision Pro Is About Immersive Experience Everywhere
With the Apple Vision Pro, you could be seated on a bus and playing video games, while still experiencing cinema-quality video and surround sound for maximum immersion.
The entire experience is powered by visionOS, a three-dimensional user interface. This operating system uses a user’s hands, eyes, and voice as the input.
For instance, users will be able to browse apps by looking at them, talking to issue commands, and pointing or tapping to select items.
As part of Apple’s diverse product ecosystem, the new Apple Vision Pro is expected to work seamlessly with existing iPhone and iPad apps, along with new dedicated ones.
Apple Vision Pro Records Moments and Memories You Can Re-Experience
Another cool feature is the ability to relive memories in a way never done before. By including a three-dimensional camera, Apple Vision Pro can record moments in breathtaking realism for later playback.
The viewer feels immersed in the moment. Beyond reliving your most cherished personal moments, this technology has significant application potential in other fields.
Apple Vision Pro And Travel
For the avid traveler, this feature allows you to capture moments from your trips in stunning detail, and then relive those moments as if you’re there again. Imagine reliving in multi- sensory detail the majestic vista from a mountain top, the bustling vibe of a market in a foreign country, or the tranquility of a secluded beach. It’s almost like having a teleportation device!
Apple Vision Pro For Education and Training Simulation
In the field of training and education, the Vision Pro can serve as a powerful tool.
For instance, medical students can virtually stand alongside experienced surgeons during complex procedures. Elite athletes can review their performances in extreme detail to fine tune their techniques. Space flight and other hazardous environments become training-safe when replayed in an immersive environment.
Apple Vision Pro Availability & Cost In Canada
According to Apple, the Apple Vision Pro will be available early in 2024 online and at Apple Store locations throughout the U.S. An exact release date for the Canadian market has not been specified yet. So far, Apple has only specified that availability for non-U.S. countries will come “later next year.”
The Apple Vision Pro will retail at US $3,499. As of writing, the exchange rate between the USD and Canadian dollar is 1.3198. Assuming this remains consistent when the Apple Vision Pro is launched in the Canadian market, the cost might be around CA $4,617. Some people might need a loan for that kind of money.
Why Invest The Price Of The Apple Vision Pro In Tech Instead?
The Apple Vision Pro costs a pretty penny. As with most new tech gadgets, going into debt to purchase it on launch day probably isn’t the most financially sound decision.
Given that $4,600 is a rather hefty lump sum of money, a better idea may be to invest that money for long-term growth, perhaps as part of an annual $6,500 Tax-Free Savings Account, or TFSA, contribution.
By picking a U.S. technology sector exchange-traded fund, or ETF, investors can potentially benefit from anticipated growth stemming from the launch of the Apple Vision Pro later. Many of these ETFs have high exposure to Apple as their top holding.
In other words, by investing, investors can get onboard with the overall growth prospects of Apple, its suppliers, and its competitors instead of just buying a product per se.
Look What Happened To Nvidia
Consider the case of Nvidia, known for its leading-edge graphics processing units (GPUs) and artificial intelligence technologies. The semiconductor manufacturer recently hit a trillion-dollar market capitalization.
In the context of Apple’s Vision Pro, the opportunity for technology component manufacturers like Nvidia and its competitors could indeed be substantial.
Therefore, semiconductor manufacturers that can deliver high-performance, energy-efficient components suitable for use in devices like the Vision Pro could enjoy substantial growth.
This might include those producing advanced imaging sensors, those making chips for processing and interpreting this data, and even those providing the memory needed to store these high-definition 3D recordings.
Exchange Traded Funds To Consider If You Want Exposure to Apple
Here’s a look at some Canadian listed ETFs that offer exposure to Apple as its top holding and other leading U.S. tech stocks. Keep in mind that ETFs holding stocks can be very volatile, and are best suited for investors with a higher risk tolerance and long-term investment objectives.
Various Nasdaq 100 Index ETFs
The Nasdaq 100 index tracks the largest 100 non-financial companies listed on the Nasdaq. Nasdaq is known for its heavy representation of the biggest U.S. tech stocks on the market.
Canadian investors can obtain exposure to the Nasdaq 100 by investing in any of the following ETFs:
- BMO NASDAQ 100 Equity Hedged to CAD Index ETF (ZQQ)
- iShares NASDAQ 100 Index ETF (CAD-Hedged) (XQQ)
- Horizons NASDAQ-100® Index ETF (HXQ)
- Invesco NASDAQ 100 Index ETF (QQC)
Currently, most of these ETFs hold as one of their top holdings at around 11-12%. Other notable tech stocks in these ETFs include Microsoft, Nvidia, Alphabet, and Meta.
However, buying U.S. sourced ETFs will require converting Canadian to U.S. dollars, which can be pricey depending on your exchange.
To get around this, consider using a Canadian brokerage like Interactive Brokers that charges low foreign exchange commissions, or read our handy guide on how using Norbert’s Gambit can help you save on foreign exchange fees.
TD Global Technology Leaders Index ETF (TEC)
The Nasdaq 100 has a U.S. only stock focus and is not a pure-play technology sector ETF. That is, the index holds other non-technology U.S. companies like PepsiCo. For exposure to only global technology stocks, consider TEC, which tracks the SolactiveGlobal Technology Leaders Index.
Currently, 85.7% of TEC is held in U.S. stocks, with Apple making up the largest holding at 14.48%. Microsoft is in second position at 13.21%. The ETF charges a 0.39% expense ratio, which works out to around $39 in annual fees on a $10,000 investment.
Evolve FANGMA Index ETF (TECH)
For exposure to six of the most famous and largest tech stocks, consider TECH. This ETF only holds “FANGMA” stocks, which stands for Facebook (Meta), Amazon, Netflix, Google (Alphabet), Microsoft, and Apple respectively. TECH holds all six of these FANGMA stocks in equal weights.
The main benefit of buying TECH over each individual stock is the ability to save on currency conversion fees. TECH trades in Canadian dollars. Moreover, a share of TECH currently trades at around $10 Canadian. This makes FANGMA investing much more accessible for investors with smaller accounts.
Firstly, from a purely financial perspective, buying products like Apple Vision Pro aren’t a sound investment. This is because such products, while being cutting-edge today, will inevitably depreciate in value as new iterations and competing products hit the market.
In contrast, investing the same amount of capital in companies that produce these products, or in those that manufacture critical components, has the potential to provide far greater financial returns over the long term. A smarter financial decision could be investing in the companies that create these groundbreaking products, allowing your portfolio to partake in their success and growth.