1 Growth Stock Down 20% to Buy Right Now

Last year, investors piled into growth stocks on optimism about lower interest rates ahead and an improving economy -- this, along with strength in artificial intelligence (AI) stocks, led the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite higher. But in the early months of 2025, concerns about President Trump's planned tariffs on imports weighed on appetite for growth stocks. Investors worried that import tariffs would lift prices of goods at home, and this would prove to be a headwind for consumers and corporate spending.

All of that could result in slower growth, and that sort of environment isn't supportive of growth-oriented companies. This sent many growth stocks lower, including technology players that rely heavily on imports and consumer spending. Though indexes have since rebounded amid signs tariffs won't be as steep and far-reaching as initially announced, bargains on growth stocks remain. In fact, one top quality tech and consumer goods player is down nearly 20% right now and represents a screaming buy. Let's check it out.

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This particular stock has suffered in recent months as the president singled it out, even threatening to apply a tariff directly to the company. But, before turning your back on this stock, it's important to consider the full picture.

Image source: Getty Images.

Unlocking a new source of growth

The player I'm talking about is Apple (NASDAQ: AAPL), maker of the world-famous iPhone, along with other top products like the Mac and iPad. Apple has built a long track record of revenue and profit growth thanks to these items and now has an installed active user base of more than 2.2 billion. This user base is key because it's unlocked a whole new stream of revenue for Apple: services. And this services revenue, due to the number of active users and Apple's broad selection of services from cloud storage to digital entertainment, has been reaching record levels quarter after quarter.

As mentioned, the biggest challenge Apple faces now -- and the one that's weighed on its stock price -- is the possibility of a tax on its imported products. The company has primarily produced iPhones in China, but in recent times, it's announced a plan to shift production for U.S. iPhones to India. Though Trump's import tariffs may impact all countries, the highest levels were planned for imports from China.

But this plan to limit tariff levels may not work because, recently, Trump threatened Apple specifically with a 25% tariff on imported iPhones. Trump's goal is to coax Apple into producing its phones in the U.S., but analysts warn that such a move would send iPhone prices surging.

This risk -- of either tariffs on imports or a costly iPhone that could hurt demand -- has prompted investors to think twice before buying Apple shares. On top of this, some investors have been disappointed by Apple's AI strategy, saying it's taken the company too long to roll out AI features across its devices.

But there are three reasons why I think Apple is a great stock to buy on the dip. First, it's unlikely the U.S. would make a move to destroy the revenue prospects of one of the country's top tech companies. The fact that Trump temporarily exempted tech products from initial tariffs shows the U.S. aims to preserve growth at home. So, there's reason to remain optimistic about the government and Apple reaching a compromise and avoiding the worst-case scenario of very high tariffs.

Apple's strong moat

Second, Apple has a tremendously strong moat, or competitive advantage, and this is its brand strength. Apple customers wait eagerly for the next iPhone and don't mind spending more on it -- they aren't known for switching to rivals. This means that even if the iPhone price rises somewhat it's very likely this won't significantly hurt product sales. And, as I mentioned earlier, Apple's menu of services represent a major driver of revenue today and well into the future, suggesting strong growth for the company over time.

Finally, though Apple has been slower than other tech giants to get in on AI, it's important to remember that we're in the early days of the AI growth story -- today's billion-dollar AI market is forecast to top $2 trillion -- so there's plenty of time for the company to excel here in the years to come.

Meanwhile, today, you can get in on this top stock for only 27 times forward earnings estimates, down from 35 a few months ago, a level that offers this market powerhouse plenty of room to run. That's why now, even though Apple faces near-term headwinds, is a good time to get in on this stock and potentially set yourself up for victory over the long term.

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.