Apple Stock This Week: Fighting Off The Bear

This week, Apple traded below $120 per share for the first time since November 2020. During the past five days, shares performed 7% lower. Below, are the main discussion topics that moved the stock.
Author:
Publish date:

Apple: iPhone Dominates The Holiday Quarter

Research company Gartner has confirmed that last year’s holiday season was ruled by the iPhone. While timing played a role, 2020 marked a key turning point for Apple’s smartphone sales.

Smartphone Vendor Sales and Marketshare in 4Q20.

Smartphone Vendor Sales and Marketshare in 4Q20.

  • A bit of a distortion

To be fair, the iPhone’s dominance in the most recent quarter comes with an asterisk. The strong numbers were made possible, in part, due to the timing of the iPhone 12’s release, which “stole” sales from the third quarter and shifted them into the fourth period.

  • A long-overdue rebound

Since 2015, both Apple and Samsung have been losing their grip on the market to Chinese players, including Huawei and Xiaomi. However, 2020 was a different story, as Apple regained over two percentage points of market share relative to the previous year.

Compared to Samsung, Apple has also clawed back more than two percentage points of market share since 2015. The difference between the two in 2020 dropped to only four percentage points, the narrowest ever.

Market Share Full Year, Apple vs. Samsung.

Market Share Full Year, Apple vs. Samsung.

Apple’s Shareholders Meeting: This Is What Mattered Most 

The Apple Maven discusses the key topics of conversation addressed during the Cupertino company’s 2021 shareholders meeting, held on February 23. Among the conversations that mattered most are future dividend hikes.

  • Housekeeping items: shareholders of record as of December 28 cast a couple of key non-binding votes. One of them was to re-elect the company’s board of directors. The second was to approve executive pay, which included the discussion on a generous equity package that could be paid to CEO Tim Cook in the future.
  • Social responsibility: a couple of items that usually do not impact financial results directly came up, as CEO Tim Cook addressed environmental standards goals and privacy. The head officer reinforced the company’s commitment on both fronts, and highlighted some key accomplishments.
  • M&A: Apple is not known for making large acquisitions – the most significant one was the purchase of Beats for “only” $3 billion, in 2014. But Mr. Cook addressed the topic during Q&A. The following quote summarizes his thoughts on the matter:

Apple Stock: March Product Refresh Could Be A Catalyst

Apple could soon announce a March 2021 product refresh event. The Apple Maven reviews some of the most likely event headliners, and explains why investors should care.

It is widely speculated, if not a near-certainty, that Apple will unveil a barrage of new products in the Spring of 2021

  • Many potential headliners

The list of potential headliners for the upcoming event is long. Leading the charge, both in likelihood and importance, is the Mac.

In November, Apple unveiled its M1 chip. Now, the Apple Maven expects to see the new chip powering other Mac models, including the 16-inch versions of the laptop. The most notable change, however, could come with the desktops. The iMac may very well get a facelift, as the new architecture allows for thinner and more elegant bezels. 

Another probable headliner is the iPad. The iPad Pro is the most likely candidate: the latest model was released just about one year ago.

  • The Apple Maven’s take

I believe that the March event, if confirmed, could be a catalyst for Apple stock. This is particularly true because of the Mac and iPad.

It will be hard for Apple to top segment revenue growth of 30%-plus in 2021. To perform well in the new year, the company will have to impress through innovation and dazzling product specs.

Stock Market Selloff: Get Ready To Buy Apple

As the stock market melts down on February 25, Apple gets closer to bear market territory. History suggests that buying the Cupertino company’s stock on the dip tends to be a good idea – but here’s the catch.

  • History is on the side of bulls

Apple trades intraday at about $122 per share. This is a 15% pullback from the peak closing price of $143, reached on January 25. The stock is not far from bear market territory.

Overall, and given enough time, Apple shares tend to head higher. This is no surprise, since the company is a classic example of success story in Corporate America.

Therefore, logic dictates that buying Apple on weakness is a good idea, because the stock eventually recovers on the back of outstanding business fundamentals.

  • But take your time…

Having said the above, buying shares on the way down presents one major risk: no one knows how far the stock will dip before it finally rebounds.

If buying Apple on the dip, it might make most sense to dollar-cost average. That is, start buying shares slowly, allowing the average cost base to lower if the stock continues to decline.

Fun fact:

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)