Apple Stock: Off To A Great Start This Week
If there were concerns about whether Apple stock could maintain momentum after its stock split, and I had plenty of my own, those have been put to rest.
Before the week of August 31 had even reached the halfway point, Apple was already up 6% by noon on Tuesday. For the past 12 months, shares have now climbed a whopping 150%. A year-long rally of this magnitude had not happened since March 2010.
Here are some of the early week developments, using my preview as a guide.
Apple stock is unstoppable
- Split excitement unfazed: Apple’s shares have split 4-to-1. What was once valued at about $525 is now four equal pieces worth roughly $130 each. I was concerned that the excitement over owning a soon-to-be-split stock would vanish overnight, but maybe Apple’s executive team was right. When it decided to make the company’s stock more accessible to a wider range of retail investors, Tim Cook and his team were hoping to generate more demand for Apple shares. The plan seems to have worked out, at least so far.
- Chatter around 5G: I have been talking about Apple’s September product and service refresh for the past couple of weeks, and I continue to expect a “save the date” to be sent out any moment. But the related piece of news that stole the headlines was Bloomberg’s report that Apple is getting ready to ship between 75 million and 80 million units of its upcoming 5G iPhone. This number largely matches last year’s iPhone 11 supply, but keep one thing in mind. The 5G-ready iPhone 12 is likely to be much more expensive, which means higher revenues at the same number of units shipped. Consider Samsung as an example: its Galaxy Note 10+ 5G model is $200 pricier than the same phone without 5G technology, a premium of 35%.
- Analysts try to catch up: “sell side love” is still in the air. As Apple shares continue to rush ahead, Wall Street scrambles to catch up. This time, JPMorgan’s Samik Chatterjee and Bank of America’s Wamsi Mohan chimed in, raising their price targets and offering words of encouragement regarding the 5G cycle, sustained pandemic-related tailwinds and share price momentum. Wamsi Mohan reminded everyone that “momentum can cut both ways”, but so far there has been no indication that Apple is ready for a pullback.
Read more from the Apple Maven:
(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)