Apple Bobs in Sinking Market
07/26/07 - 01:37 PM EDT
Daniel Del'Re
Shares of Apple (AAPL Quote - Cramer on AAPL - Stock Picks) bucked the stock market Thursday, continuing their steady ascent the day after posting a 73% jump in third-quarter profit.
Investors shrugged off Apple's typical low fourth-quarter earnings guidance and middling iPhone sales, focusing instead on strength in Apple's core Mac and iPod franchises. These businesses are firing on all cylinders in Apple's largest market, North America. At the same time, Apple's sales are gaining steam in Europe and the company is touting the iPhone's potential to become its third powerhouse franchise. "The company is in a fabulous position, and there's nothing to suggest that healthy dynamics of business have changed," says Darren Chervitz, director of research at Jacob Asset Management. "The company's gaining share in the computer market, it owns the digital music market with the iPod, and they had a good showing with the iPhone." Apple shares comprise about 2% of Jacob's $102 million tech-oriented fund. Apple, which touched a new intraday high earlier Thursday, was recently up $8.80, or 6.4%, to $145.99. The Nasdaq, meanwhile, was in the midst of a heavy selloff, losing more than 2%. In the third quarter, Mac shipments surged 33% and sales jumped 36%, fueled by torrid growth in notebook computers. Notebook unit shipments rose 42%, generating $1.58 billion in sales, a 36% increase. Notebooks accounted for 29% of revenue in the quarter, up from 26.5% a year earlier.
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