Apple (AAPL) - Get Apple Inc. (AAPL) Report shares surged to a fresh record high Monday, boosting the market value of the world's biggest company past $2.7 trillion, as analysts look to improving iPhone 13 supply data heading into what could be a robust holiday shopping period.
JPMorgan analysts noted improving lead times for supplies of Apple's signature iPhone 13, which was launched in mid-September, suggesting a ramping-up of supplies heading into the crucial Black Friday weekend and holiday shopping season.
Consumer spending surged to a record $638.2 billion in October, Commerce Department data noted last week, while big box box retailers such as Target (TGT) - Get Target Corporation Report and Walmart (WMT) - Get Walmart Inc. Report boosted their holiday quarter outlooks following stronger-than-expected third quarter earnings.
Earlier this month, the Nikkei business newspaper said iPad production runs are about half of their normal pace over the past two months, owing to Apple's decision to prioritize chips for its new iPhone 13, which it expects to generate stronger demand over the holiday season.
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Apple noted in its September quarter earnings report that supply chain woes ripped $6 billion from its September quarter sales and expected the disruption to impact its current quarter revenues, with CEO Tim Cook vowing to "reduce our lead times and cycle times, so that when you get a chip off of fab that -- as quickly as possible -- gets into a product and shipping."
Apple shares were marked 2.85% higher in mid-morning trading Monday to change hands at $165.20 each, a move that extends the stock's six-month gain to around 30%. Apple hit an all-time high of $165.70 each earlier in the session.
CFO Luca Maestri told investors on a conference call that December quarter sales would be "very solid", and likely hit a record high, with gross margins in the region of 41.5% to 42.5%.
Still, Cook did caution in October that "we're doing everything we can do to get more (chips) and also everything we can do operationally to make sure we're moving just as fast as possible" heading into the holiday quarter, with other reports noting Apple could slash production by as much as 10 million units , taking the overall end-of-year total to around 80 million units, as a result of delays from major supplies such as Broadcom (AVGO) - Get Broadcom Inc. Report and Texas Instruments (TXN) - Get Texas Instruments Incorporated Report.