At the midpoint of the fourth quarter of 2020, Apple shares moved lower during this week. Here is a recap of the recent events that could have driven the stock lower.
Where Wall Street currently stands
Much has happened in the markets lately, but one thing has not changed: consensus bullishness towards Apple. Here is what Wall Street analysts have been saying about the company and its shares.
- From the bear side, Goldman Sachs’ Rod Hall believes that Apple “expects just single digit growth for iPhone in Q1, which he said would be below the high 20s percentage growth needed to keep up with last year's Q4 plus Q1 cycle”. He continues to believe in the “weaker 5G iPhone cycle rather than the 'Super Cycle' expected by consensus”.
- From the bull side, Andrew Uerkwitz seems excited about the M1 chip that powers the couple of Mac models that Apple has recently announced. The analyst expects “M1-equipped Mac products to drastically outperform the predecessors”, which should bode well for future sales of Apple’s personal computers.
Buffett sheds Apple, but is still a raging bull
Warren Buffett’s Berkshire Hathaway sold over $4 billion worth of Apple stock in the third quarter. However, as I wrote a few days ago, Apple shareholders should not worry too much about losing the “Omaha seal of approval”.
The App Store is back in the news
Apple has announced that App Store commissions will be lowered to 15% for small businesses earning up to $1 million per year. The initiative seems targeted at diffusing overall developer discontentment, as well as weakening Epic Games and the government’s case against the platform.
Could the new payment policy cause a drag to Apple’s service revenues in 2021? Time will tell.
Rocky recovery in the fourth quarter
We are past the halfway point in the fourth quarter of 2020. Apple shares have been recovering from a turbulent September, but not in a straight line.
The introduction of the iPhone 12, the post-election liftoff and the "One More Thing" event were the key drivers that have sent Apple’s share price up and down so far in the fourth quarter.
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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)