What everyone expects to be the last wave of COVID-19 cases before the global pandemic is brought to its knees continues to wreak havoc, for now.
Apple has started to shut down stores around the world. In the home state of California, all 53 locations (roughly 10% of the total global count) have now been closed temporarily. This is the second time that a full shutdown of Apple stores in California has happened, the first since March.
Possibly a negative catalyst
As the year comes to an end, store closures could be the unexpected last catalyst of 2020 putting pressures on Apple stock. On Monday, December 21, shares trailed the performance of the S&P 500 and Nasdaq in the morning, but not by much.
Following the March shutdowns, Apple’s financial results suffered in the second fiscal quarter of 2020. But the company leveraged its e-commerce channel to produce minimal, positive revenue growth for the period, despite the odds.
The following quarter looked good on paper, but the stock took a hit whenever news of store closures crossed the wire. In July, for example, shares dipped as much as 6% in a matter of a few days, just as about one-third of Apple’s US locations went dormant for a while.
What to expect
I believe that Apple shares could be sensitive to the evolution of this winter’s COVID-19 wave. However, the Cupertino company has proved that it can function well off its digital platform.
In my view, a share price pullback driven by store shutdowns could be painful, but ultimately prove to be buying opportunities. Potential investors should keep an eye on price action, and consider pulling the trigger if the stock becomes substantially more affordable.
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