Nothing seems to shake Apple’s stock.
In a week marked by news that could be seen as bearish, shares of the Cupertino company climbed yet another 3.4%. As I mentioned a couple of times recently, the stock reached an intraday market cap of $2 trillion for a hot minute – but failed to close the trading session above these levels.
Year-to-date, Apple is already up nearly 58%, while the S&P 500 has yet to fully recover from the COVID-19 correction. Apple has also outperformed the information technology (ticker $VGT) and consumer discretionary (ticker $VCR) sectors by at least 33 percentage points so far in 2020, and the FAAMG ex-Apple group by a respectable 23 percentage points.
Here are some of the key factors helping to lift the stock this past week:
- Rumors have resurfaced that Apple will offer bundled service packages called “Apple One”. In my view, this could be the next game changer for the company’s services segment, after Apple successfully doubled 2016 revenues in the current year.
- Apple was the target of yet another round of bullish research notes from Wall Street. Wedbush’s Dan Ives, for example, issued a Street-high price target of $600 per share, suggesting that market cap of $2.6 trillion is within reach.
However, not everything was good news – far from it:
- The number of smartphone shipped in China fell off a cliff in July. Apple should, once again, struggle to generate growth in the country in the near term.
- Notorious Apple analyst Ming-Chi Kuo estimated that an App Store ban of WeChat could cause global iPhone shipments to drop 30%. While I find this estimate overly pessimistic, it is likely that the impact of a ban would be noticeable.
- Epic Games has sued Apple for its App Store practices, as the Cupertino company removed Fortnite from the platform. While the lawsuit itself should not be damaging to Apple’s balance sheet, the reputation risk, exposure to further antitrust scrutiny and potential drop in future App Store commissions could all bode ill for the company and its financial results.
Below is a chart that compares the performance of Apple stock against the S&P 500 and the industry. Apple’s dashboard is looking great for momentum traders. Value investors might be less excited, as shares continue to trade at a historically high “premium” to 50-day and 150-day moving averages.
Explore more data and graphs
The data used in this report was provided by Stock Rover. I have been impressed with the breadth and depth of information on markets, stocks and ETFs that this platform provides. Stock Rover also helps to set up detailed filters, track custom portfolios and measure their performance relative to a number of benchmarks.
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(Disclaimers: the author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)