Does Apple Volatility Suit Traders?
Apple, the world’s most valuable tech company, has been on a bit of a share price roller-coaster in recent months. Its shares came under significant pressure during the run-up to the company’s most recent earnings report as rumours swirled that iPhone X sales had significantly underperformed against the company’s expectations.
Once the results came out, however, the mood changed immediately and Apple shares hit $187 on Monday morning. Phone sales had outperformed the market’s expectations and the company looks set for another bumper year. But can the good times continue forever? Let’s take a look at the projects Apple has in the pipeline and consider the odds of the bumper earnings stream continuing.
Who’s Backing Apple?
Warren Buffett, the closest thing that the world has to a celebrity investor, is very bullish about the tech giant’s prospects. His Berkshire Hathaway investment vehicle now owns more than 100 million shares of Apple stock and has announced that it plans to buy even more in the event of a downturn. However, the massive share buy-back plan that was announced during the earnings call is likely to prevent this from happening anytime soon.
Company analysts have been less bullish, however. Many have reported that orders in Apple’s Asian supply chain have been cut significantly, which could be an early sign of softening demand for the company’s products.
What Will Apple Do Next?
Pressure is growing on Apple to introduce a new category of products that it can dominate. While the Apple Watch has been a slow-burning success, it can’t compete on the same playing field as the iPhone. Apple has benefitted from renewed interest in its iPad line since the launch of the iPad Pro, which gave the product the chance to be a true laptop replacement for the very first time.
Rumours as to which business area Apple will enter next are thin on the ground, whispers have been circulating for years about self-driving cars and televisions, but there is little concrete information available at present.
Apple is in a better position than it was before the earnings call and this may buy it some breathing space to make its plans for the next few years.