Apple stock zips past $130
Not long ago, Apple stock looked cheap at $116 apiece. In only one month, shares managed to climb 14%. Two weeks ahead of earnings day, is this still a good time to buy Apple, now only 7% below the peak?
Fundamentals vs. valuation
Few have tried to make (and none have been proven right on) a convincing bearish argument on Apple shares. Goldman Sachs’ Rod Hall is perhaps the most notorious Wall Street professional to hold overwhelmingly negative views on the Cupertino company’s business and stock.
But generally, consensus suggests that Apple and its shares should do just fine over time. Among the most bullish fundamentals arguments used to justify owning a piece of the company’s equity are:
- The early stages of the 5G refresh cycle that could breathe life into an otherwise mature product category: smartphones
- Greenfield opportunities in autonomous vehicle (i.e. the Apple Car) that could produce a fresh inflow of sales and earnings where none currently exists
- The potential doubling of service and wearables revenues within the next five years, possibly aided by the introduction of a mixed reality device
- Large quantities of cash that should continue to finance investments in growth, payment of dividends and share repurchases
Apple stock could rise from strength in this key segment
Third-party research data on calendar first quarter personal computing sales has started to pour in. Depending on who is asked, IDC or Gartner, PC shipments have increased by an impressive 32% to 55% in the March period.
From the preliminary data provided by the research companies, here is what else we know about computer sales in Q1:
- Lenovo continues to lead the industry, with 24% to 25% of market share, followed closely by Windows-based peers HP and Dell;
- Despite holding the number 3 position in the market, Dell may have been the relative loser in first quarter device shipments;
- Apple remains a distant fourth-place player in the PC arena, although its market share seems to have increased by at least one percentage point to 8%.
How Apple stock could benefit
The Mac accounted for only 10% of Apple’s fiscal 2020 total revenues, and an even lower 8% during the more normalized 2019 period….