by Umar Farooq
Apple’s stock is driving upwards due to investors’ expectations that the new iPhones launch, due in September, on the 10th anniversary of the original iPhone’s introduction, will be dazzling enough to inspire existing iPhone users to upgrade and prompt others to switch from Android phones made by Samsung, Huawei and other manufacturers.
“A year ago, many investors had given up on Apple, whose stock price had fallen more than 30 percent from its 2015 peak. Apple’s once-unstoppable growth had come to a crashing halt: The number of iPhones sold was down 13 percent, and the company posted its first revenue decline in 13 years. Today, Apple’s business remains sluggish, but that hasn’t stopped investors, including the famously tech-averse Warren E. Buffett, from falling in love with it again. Shares of the tech giant — the most valuable company in the United States by market value — have repeatedly hit new highs this year. On Friday, they closed at $143.65, up nearly 60 percent from last May’s trough.” nytimes
Investors appear to be relieved that Apple sales have stabilized after last year’s drop, said Neil Cybart, an independent analyst who writes about Apple at the website Above Avalon. “There is at least increased confidence in what Apple can do in the future,” he said. Heavy buying of Apple shares by Mr. Buffett’s company, Berkshire Hathaway, and by Apple itself has also helped support the stock price, accounting for one month’s trading volume in the shares, according to Mr. Cybart’s calculations. Berkshire is now Apple’s fifth-largest shareholder, owning 2.61 percent of the company as of Feb. 27.
“Dan Ives, formerly a top Apple analyst, said Apple is indeed a special stock at the moment, thanks to building anticipation for the next iPhone, to be released later this year. “If you look at the industry, this has been one of the most anticipated product releases in years,” said Ives, who is now a senior vice president at mobile technology firm Synchronoss. “I think when you look at Apple and the ecosystem, going into the iPhone 8 potential supercycle, there’s obviously a lot of positive thoughts across the board going into this release.” cnbc
Also, earnings season’s main event will hit the tap this week, as Apple Inc. AAPL 2.04% is scheduled to report its fiscal second-quarter results after Tuesday’s market close. Apple impressed investors back in February with its first-quarter report, and the stock is up nearly 25 percent since the start of 2017.
At $146 apiece, shares of Apple‘s stock now have a higher price tag than ever, adjusted for a 2014 stock split. Yet Wall Street recommends that investors continue to shell out ever-higher prices for the stock. Seventy-seven percent of analysts in FactSet recommend buying Apple shares, even as the price per share gets within 5 percent of their May target of $153.86 a share. Twenty-three percent recommend holding the stock — and not a single analyst recommends cashing out and selling the stock, even at its all-time high.
by Umar Farooq