Apple’s stock races ahead as investors bet on new iPhone
A year ago, many investors had given up on Apple, whose stock price had fallen more than 30 per cent from its 2015 peak. Apple’s once-unstoppable growth had come to a crashing halt: The number of iPhones sold was down 13 per cent, and the company posted its first revenue decline in 13 years.
Today, Apple’s business remains sluggish, but that hasn’t stopped investors, including the famously tech-averse Warren E Buffett, from falling in love with it again. Shares of the tech giant — the most valuable company in the United States by market value — have repeatedly hit new highs this year. On Friday, they closed at $143.65, up nearly 60 per cent from last May’s trough.
What’s driving the stock, say skeptics and fans alike, is hope — hope that the new iPhones due in September, on the 10th anniversary of the original iPhone’s introduction, will be dazzling enough to inspire existing iPhone users to upgrade and prompt others to switch from Android phones made by Samsung, Huawei and other manufacturers.
“Everyone expects Apple to cure cancer with their next product launch,” said Kevin Landis, chief executive of Firsthand Funds, who has managed tech-focused mutual funds through many ups and downs.
Investors will get more data about Apple’s performance, and perhaps some clues about its future, on Tuesday, when the company reports its results for the financial quarter that ended in March. Analysts expect the company to report a slight increase in iPhone sales and overall revenue.
Apple declined to comment ahead of its earnings report.
Landis sold most of Firsthand’s Apple position near last year’s bottom, but he said he had no regrets despite the stock’s recent gains. He expects Apple to continue churning out incremental improvements rather than shake up the industry. The biggest change in last fall’s iPhone 7, he noted, was the elimination of the headphone jack.
Apple is expected to make more exciting updates in its next high-end iPhone, including a high-resolution screen that covers the phone’s entire face. But the company has also suggested that much of its future growth will come from services like Apple Music, Apple Pay and the cut that Apple takes from application sales and subscriptions in the app store.
Apple executives, who are fond of using the word “revolutionary” to describe their products, have also acknowledged some missteps.