Based on options trading, AAPL is screaming BUY, especially at an entry point below $500. It fell down to $498 earlier today and will likely remain volatile until earnings next week.

seekingalpha.com

While I myself am bullish on AAPL, I would suspect that the following are a few reasons investors are skeptical.

1) Essentially every product Apple offers has been recently overhauled, and any new product Apple releases is likely to have lower margins.

2) The most popular Apple products selling right now are the ones with lower margins, which is great for user market, but not for the stock market.

3) The one product that could really turn things around, the Apple television, is only rumored, and could be released any time been now and 2 years from now. The fact that Apple must negotiate with content networks is not reassuring.

4) Apple's stock price ebbs and flows with the rumor mill. From what I can tell, it's much weaker than usual.

The stock to me has always been over-saturated. They're just like every other tech company, but on a higher-expectation scale. Now that they haven't really launched any revolutionary products in the past three years, they're just updating them, nothing huge. Google on the other hand is in a ton of business', including their biggest, advertising. Their stock makes sense and reflects, in my opinion. Unless Apple does something huge again, I think their stock will continue to fall, not too low, maybe around $400-$475, where it belongs.

Disclosures: I'm long $AAPL. However, I wouldn't get in at the current price ~$500. The risk range for trading $AAPL is trending lower and there is a lack of support at $500, it's gonna go lower. What everyone needs to remember about the stock is that it is currently being traded heavily by technical traders and not on fundamentals - they WANT a "head and shoulder's" pattern in the chart. (riskreversal.com)

I would wait to see how the next 3 days shake out before earnings, but retail investors who have been buying on it's way down from $540 to $500 and anyone who decides to get in over the next 2-3 days risks getting taken to the shed as I see it going back to $450 right before earnings and then jumping after the #'s are huge.

I guess the argument against is speculation related to a round II of the closed versus open systems war. In the 90s Windows 95 essentially destroyed Apple with its open system. Fast forward almost 20 years and we're seeing a similar head to head with Android versus iOS. However, we are in a very different technological landscape today and to suggest that there will be a rapid overnight winner is myopic. The Apple ecosystem provides a lot of natural defensibility against churn and it looks like iCloud is going to continue to be a big focus. Apple is still growing desktop marketshare and completely own tablets. If iTV does make an appearance this year there's a good chance the stock will soar again. P/E is only $11.36... it's a buy.

To be clear: The Q is regarding $AAPL @ $500. We aren't arguing about $AAPL business model, close vs open systems or AAPLs bright future. I'm long $AAPL. We're talking about making an investment decision based on valuation & current pricing trends around AAPL. If you get in at $500, you are going up against a massive wave of institutional technical traders that are "trading" the risk of $AAPL, NOT "INVESTING" in it. Fundamentals like PE do not matter in this environment. The Vol alone should scare you. Retail investors get slaughtered in these situations UNTIL support & stability return, which @the current levels, DON'T EXIST. Is it possible post earnings that it's above $550, yes, but it it's also highly likely it goes to $420-$450 before.

The Q didn't specify as to whether or not this is a long or short term order for him. You can speculate about the bottom but even if it continues to contract getting in at current prices will most likely lead to a net positive in the short or long term.

To add to Justin's point about volume + technical traders, we can simply look at the huge sell-off that occurred on December 4th, which, compared to today, had no news or information hitting the wire. The stock plummeted 6.44%, with a volume of 37.3 million, for no simple/obvious reason.

Apple is very widely held amongst various funds, so you can bet institutional traders can really affect which way the stock goes. Any correlated portfolio rebalancing or profit taking can have an effect on the share price on a given day.

More money to raise the debt ceiling, prevent fiscal cliffs, and fund wars means price fluctuation (inflation). While the Fed says 2% annually there are economists saying it's closer to 9%. The "price" is a signal to the market and in times of financial uncertainty I think Apple might be a place people and larger funds may want to secure some money. Prices will rise.

What that "price" will really mean in a currency that has lost something like 90% of its purchasing power in 100 years is up to the buyer to determine. I would buy and hold. Long on $AAPL for me.

Alternatively, I think Apple might be shooting themselves in the foot. All of you are fantastic minds in the industry. You are all insiders with experience and deep understanding of the market. I'm an outsider, a consumer. Although I'm an Apple fanboy it seems the product is getting "recycled" at a very parochial level. I still buy each item that comes out but I can understand Android friends who shout to the heavens "there isn't much new" with Apple. My iPhone 5 is a marvel of tech and is PERFECT but to most people it's "an iPhone with a bigger screen". This can hurt the price of the stock because the hype fades.

The main downside, is that Apple's stock price and it's business fundamentals have virtually no connection at this point. The market's irrationality, especially in the case of Apple, adds a fair bit of risk where there should be relatively little. That said most analyst have goals far above current prices, so it should be a good investment longterm.