As of the close of business Thursday, February 11, Apple stock had moved slightly lower for the week: -1.2% against the S&P 500’s +0.8%.
While recent price action has not been out of ordinary for Apple shares, there was no shortage of attention-grabbing news on the Cupertino company. Today, the Apple Maven briefly addresses a couple of the most significant developments of late.
It did not take long for the rumor spreaders to be (possibly?) proven wrong about the Apple Car. On the same day that the Apple Maven reported again on the speculated new product, Hyundai clarified that it was not in talks with Apple to build the self-driving electric vehicle.
Not much of a surprise, the rumor mill did not stop there. The most recent hypothesis suggests that French auto maker Renault could be a good match for Apple and its EV project.
The bottom line, as I have argued before, is that investors should be cautious. Any new developments on Apple’s non-core business ventures, including the eventual launch of a self-driving car, should be taken with a grain of salt.
As I mentioned in a previous article, regarding the late 2020 market hype around the Apple Car that led to shares rising 10% in the last half of December alone:
“The spike in Apple stock was a bit overdone, a bit too fast. It can probably be best explained by knee jerk reaction and enthusiasm over an interesting EV story that, for now, does not offer much in terms of quantifiable business opportunities.”
Beware of any potential stock price run that might be fueled by the hottest new take on Apple’s driverless car initiatives.
Jumping on the crypto bandwagon
Bitcoin has been on a tear in the past six months. The mother of all cryptocurrencies has nearly quintupled in value since September of last year.
It is not much of a surprise that marrying Bitcoin and Apple would make for great headlines, possibly shifting the latter’s stock price up or down in the process.
RBC analyst Mitch Steves has said that Apple “should develop Apple Wallet into a crypto-exchange and add Bitcoin or another cryptocurrency to its balance sheet”, thus opening up the opportunity for (are you ready?) well over $40 billion in annual revenues!
The news came alongside Tesla’s $1.5 billion investment in Bitcoin, disclosed on Monday. Since then, Tesla stock has dropped 5%, while Bitcoin’s value has shot up another $10,000. However, it is unclear whether the price of Apple shares was influenced by the market moves in the crypto space.
I believe that the buzz around Bitcoin can help the coin itself, as it continues to gain credibility. As it pertains to Apple stock and its investors, I think that the hype can and should be largely ignored.
I continue to defend the idea that Apple is a great investment for the long term due to the strong fundamentals of its business – not an instrument to day trade on the heels of the buzz-worthy news of the week.
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(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)