Apple: The 5G Super Cycle Is Happening

Apple traded more than 3% higher at the start of Tuesday’s session, after reports of impressive iPhone production targets in 2021. Could this be the catalyst that finally keeps shares above the $125 mark?
Author:
Publish date:

Only hours after the Apple Maven pointed out that Apple stock had been “range-bound”, shares sprung forward. Talk about timing!

Apple traded more than 3% higher at the start of Tuesday, well ahead of the S&P 500 and Nasdaq. Shares of Apple breached the $125 mark, and now the challenge will be for them to stay above those levels – something that has not happened since early September.

Interestingly, all other FAAMG stocks plus Tesla, Intel, Netflix, Alibaba and NVIDIA kicked off the Tuesday trading session in negative territory.

All about the iPhone

The main reason for all the optimism was the iPhone. According to Japan’s Nikkei Asian Review, as reported by The Street, Apple has “instructed suppliers to produce around 230 million iPhone handsets next year, a 30% increase from the pre-pandemic pace of 2019”.

One key Apple supplier provided further color:

The outlook is impressive, and probably well beyond any expert’s most bullish expectations. It is true that last year’s iPhone shipments were not necessarily robust. But 30% growth is a very bold target that underscores the scale of the 5G upgrade cycle.

Other data points support optimism

The positive news from Japan came on the heels of other favorable data points shared this week.

On Monday, the Apple analyst at Wells Fargo highlighted a couple of numbers coming from China that suggest strong device sales in the fourth quarter.

  • Mobile phone exports out of China increased by more than 60% in November, suggesting over 55% growth in the holiday quarter so far. Keep in mind that about half of Apple’s largest suppliers are based in China.
  • Shipments for non-China branded mobile phones (i.e. Apple, Samsung) doubled year-over-year in November.

As a reminder, Greater China has been a soft spot for Apple since 2015, when sales from the region accounted for one-fourth of total company revenues.

Should demand for Apple products and services in the country rebound, the stock would likely react positively in 2021.

Read more from the Apple Maven:

Apple Stock Is Range-Bound, What Could Push It Higher

What Moved Apple Stock This Week

Apple Stock: A Look At Wall Street Opinions This Week

(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)