After recording a new high, how long can AAPLE hold on at over $100?
Apple Inc. (NASDAQ: AAPL) today has recorded its new 52-week high of $101. 09. Thanks to the hype of the iPhone 6’s eminent launch, and other products in the pipeline, AAPL has had a bullish run and is expected to topple the Sept. 19, 2012 split-adjusted record of $100.30.
The bullish run has seen Apple trade over 53,450 shares over the last three months and gaining about 40.1% from August last year to date. Generally, since January last year the stock has gained 27.3%, yet analysts are still declaring AAPL a buy, just like last time. Will the stock hold on trading at over $100, or is it headed for another precipitous fall?
AAPL 2012’s abrupt fall and the current Rally
In 2012, Apple’s run was built around the then eminent release of iPhone 5, like it is happening again with iPhone 6. However, iPhone 5that was competing with the Samsung debutant Galaxy S3.The Samsung flagship had been released in May that year, and it was the first Google Inc.’s (NASDAQ: GOOGL) android phone made to counter iPhone’s dominance. S3 had set the bar so high that iPhone 5 fall shot and performed miserably. The Steve Jobs’ factor was also still in play, as many investors thought that the company was hollow without his hit products ideas.
The current situation is very different. Smartphone users are not only waiting for the release of the Steve Jobs’ phenomenal “…one last thing”, but the Smartphone that will address areas where Apple has not been getting it right. The phone expected to have larger display made from Sapphire Glass. What’s more, there are other products in the pipeline that are scheduled for release. These products include the iWatch and iPad Air.
Besides Apple’s pipeline, the other factors that have helped the price rally include:
Stock buyback plan: The iPhone maker has been buying back its stock since June 2013. Its CEO, Tim Cook announced in early February that they had bout back shares worth $14 billion in less than two weeks. In April the company added $30 billion to the plan and also raised its dividends. Its board raised the purchased plan budget from the $60 billion a year earlier to $90.
Expansion in emerging markets: Apple saw its iPhone sales shoot up 55% year over year in the Brazil, Russia, India and China (BRIC countries) during its just ended quarter. Its partnership with China Mobile was to thank for this. However, there are emerging reports in China that Beijing has ordered the three government back Telco’s, China Mobile included, to sever links foreign mobile manufacturers to help the local companies. This might affect iPhone prices, as the carrier had subsidized the smartphones. This might be a huge blow to not only Apple, but also its close rival Samsung.
Partnership with IBM: Apples partnership with International Business Machines (NASDAQ: IBM) caught many by surprise but it has been held with high regards. The partnership is expended to rescue iPad’s floundering sales. The tablet, Apple’s second most valuable product, has continued to perform a miserably. However, the upcoming iPad Air 2 that has Microsoft (NASDAQ: MSFT) Office is expected to have a long term adoption among business enterprises courtesy of the partnership
This is not the first time Apple has topped $100 a share. Its record high came in September 2012 and after which the stock dipped to below $400 while analysts expected it to run past $1000 mark. Many analysts believe the current situation is different, but is rally different?