Apple has shot to the moon once again. During its earnings week, shares of the Cupertino company rose by a whopping +14.8%, outshining the performance of a strong broad market and the tech industry (both of which benefited from Apple itself).
The stock is now worth about $1.85 trillion. In the race to $2 trillion, Apple now seems most likely to reach the milestone first, with only about 9% in capital appreciation left to go.
Why Apple spiked
It was all about fiscal third quarter earnings. Sure, Apple’s stock had already been up 4% for the week by Thursday, in part fueled by a few more bullish sell-side earnings previews that were published on Monday and Tuesday. But in the end, it all came down to Apple’s historic, blow-out report delivered on July 30, which I covered in detail and in real time.
I invite the reader to check out my post-earnings video for more details. But at a high level, investors have embraced the narrative and rallied around Apple due to, among other things:
- Much better-than-expected months of May and June, following a month of April that looked very concerning as the COVID-19 crisis peaked.
- A resilient iPhone business that performed well in most geographies, aided by a popular iPhone 11 and the launch of the smaller and cheaper iPhone SE.
- Impressive sales coming from stay-at-home products like the iPad and Mac, two surprisingly strong segments this time.
- Confirmation that the services business has plenty of air under its wings.
- Possibly some relief over the 5G cycle, now that uncertainty regarding potential product launch delays (now officially confirmed) has been put to rest.
The table below summarizes Apple’s stock returns over different periods, compared to the performance of its sector and the broad market. When it comes to short-term and long-term momentum, notice that Apple is head and shoulder above the S&P 500 and its peer group.
All the numbers, tables and graphs in this article have been provided by Stock Rover, my favorite source for data and insights on stocks, ETFs and markets. Check out the platform and sign up for as little as $7.99 per month. The very affordable Premium Plus plan that I currently have will give you access to all the information that went into my analysis, and much more.
(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)