Apple, where the iPhone 15 almost suffered a Waterloo, has hit a new high in stock price.
As of December 8**, Apple's market capitalization once again exceeded $3 trillion, reaching $304 trillion US dollars, and this is the first time since August last year, the company's stock price has been **211%。
This has led many people to wonder how Cook could have ushered in a surge in stock prices when the product has been questioned and the quality is worried
In fact, despite declining sales of iPads, iPhones and wearables, Apple's stock price has shown surprising resilience, with the stock up nearly 50% so far this year. The perspective of the capital market's main observation of enterprises is not the same as that of ordinary people, and from the perspective of a healthy development company, Apple seems to be doing a good job under the leadership of Cook.
From the perspective of Wall Street analysts, Apple, which already has a huge stock of device data, is only a temporary problem with new product sales, and what will really affect the long-term development is that they can use the huge number of iPads, iPhones, and wearable devices in the hands of consumers to form new growth in content services and consumption, and finally drive the transformation of the enterprise.
Because of their optimism about Apple's new business, some of the top Wall Street analysts expect the iPhone maker's stock price to reach the highest price target of $240 given by analysts in the next 12 months. This suggests that Apple's share price has a further **24 from current levels08% potential.
It's no wonder that Apple's ** will continue to go higher.
In early November, Apple released the company's earnings report for the fourth quarter of fiscal 2023. In the quarter, Apple achieved revenue of 8949.8 billion US dollars, a year-on-year decrease of 0.72%；Net profit was 229$5.6 billion, a year-on-year increase of 1079%。
Although the revenue of the iPhone business has increased, the other hardware businesses have not performed well, so Apple's revenue has declined year-on-year for four consecutive quarters.
According to the financial report, in the third quarter, the revenue of the iPhone business was 438$0.5 billion, compared to $426 in the same period last year$2.6 billion;MAC revenue was 76$1.4 billion, compared to $11.5 billion in the same period last year0.8 billion USD;iPad-related revenue was 64$4.3 billion, compared to $7.1 billion in the year-ago quarter$7.4 billion;Wearables, Home & Accessories business revenue was 93$2.2 billion, compared to $96.6 in the year-ago quarter$5 billion.
Focusing on the Chinese market, Apple's revenue in Greater China was 150$8.4 billion, down 2% year-on-year. According to data tracking from market research agency Counterpoint, the sales of the iPhone 15 fell by 4 percent compared to the iPhone 14 in the 17 days after its release5%。In order to drive sales, Apple has made an unprecedented price reduction for its products in the Chinese market.
On November 14th, the topic iPhone 15 Double 11 was reduced in price in the last two hours and appeared on the third hot search list on Weibo, winning 1900 million views. Some netizens said that Apple's official *** Double 11 "violated its "promise", and the iPhone 15 cut the price by 200-300 yuan in the last two hours, feeling that he was "backstabbed" by Apple. The latest news shows that during the double 12 period, Apple's iPhone 15 will reduce the price of the whole series by about 800 yuan.
In the main market of the United States, in fact, the sales of the iPhone 15 are also completed by price reduction. CIRP statistics show that since the beginning of this year, the number of U.S. users who buy iPhones through direct sales channels has fallen to a new low, only 17%, of which about 11% come from physical Apple stores, and 6% from Apple's official website, and the biggest winners are mobile operators, accounting for 79% of iPhone sales. Among them, in order to promote the sales of iPhone15, several major operators in the United States have given the benefits of spending subsidies, so that consumers are more willing to change their phones. And this kind of subsidy is actually a price reduction.
However, the hot spot in the earnings report is actually Apple's service business, which performed very well, with revenue of 223 in the third quarter$1.4 billion, an increase of 1629%。
This has become the real good news that can be said in the third quarter report, in addition to the price reduction that triggered the sales growth, and it is this that makes analysts vote in favor of Apple's development.
The iPhone's high revenues, continued strong growth in the services business unit, and a growing active device install base will support Apple's financial position and**. However, a tough comparison with the year-on-year period could affect iPad sales. At the same time, weak sales in Apple's wearables, home and accessories business units will continue to weigh on the company's performance in the near term.
Meanwhile, Wedbush analyst Daniel Ives remains bullish on Apple's outlook and said at the end of November that it maintained its "**** rating." The analyst's optimism is based on strong sales of the iPhone and strong momentum in Apple's service division.
In other words, many institutional investors have shifted their research on Apple's development from the sale of hardware devices to the business of software and content services such as apps.
Previously, Apple has been known for its hardware device sales, such as iPhone, iPad, Mac, etc. The sales revenue of these hardware devices is one of Apple's main revenues** and an important support for its stock price**. However, over time, the focus of institutional investors on Apple has changed.
But now, many institutional investors are starting to pay more attention to Apple's business in software and content services. For example, revenue from services such as Apple Music, iCloud, and the App Store has gradually become one of Apple's most important revenues**.
According to the financial report data, Apple has more than 8 users600 million, many people buy digital products and services from the App Store. Morgan Stanley recently noted that if Apple focuses on a "more pronounced shift to a subscription-based model," the final value generated by its subscription services could reach $3 trillion.
What's more, Apple has begun to raise prices for subscription services this year.
As early as October 25, Apple announced overseas that its Apple Music, Apple News, Apple TV + and other subscription services **adjusted, generally**10%-15%. On December 10, Apple's official website showed that Apple Music China raised its subscription**, student subscription***1 yuan to 6 yuan per month, individual subscription***1 yuan to 11 yuan per month, and family subscription ***1 yuan to 17 yuan per month.
According to JPMorgan analyst Samik Chatterjee, the total number of Apple Music and Apple Arcade subscribers could reach about 1800 million, of which 1100 million users pay for the company's best services, and 70 million users pay for games.
To some extent, these services not only bring continuous revenue to Apple, but also enhance users' loyalty and stickiness to the Apple brand.
UBS analyst D**ID Vogt said in a note that Sensor Tower data showed App Store spending grew 11% year-over-year last month, supporting the agency's 16% increase in Apple's services division as a whole in the quarter.
As a result, Apple began to pay more attention to the development and promotion of software and content services. This includes continuously optimizing existing services, launching new services and applications, and strengthening partnerships with content providers. Apple's share price will also be further supported by continuing to meet the needs and expectations of institutional investors.
Notably, Apple has set an all-time revenue record in the services sector, with the company achieving double-digit growth in the fiscal fourth quarter.
Tigress Financial's analyst Ivan Feinseth reiterated his "** rating" on Apple in mid-November. Analyst Feinseth has given the stock a price target of $240, and the analyst expects "record iPhone sales and service revenues, as well as margin growth" to support Apple's financials and enable the company to improve shareholder value.
With its stable and long-term growth performance, Apple has undoubtedly become a team that has attracted much attention. The driving force behind this is the continued demand for iPhones, especially in emerging markets, where the consumption potential is huge, providing a broad space for Apple's product sales.
Coupled with the strong momentum of the company's growing services division, it has shown strong growth momentum in terms of both revenue and profit. These positive factors are reflected in the optimism of analysts about Apple's prospects, and further confirm Apple's strength and potential.
Specifically, Wall Street analysts rated Apple very highly. Of their ratings, 25 gave ** recommendations, while 8 maintained hold ratings. This gives Apple a unanimous rating of "strong".
This rating not only reflects analysts' strong confidence in Apple's future, but also shows that they believe that Apple** has high investment value and growth potential as Apple begins to focus on service revenue.
In addition, the analysts also conducted a ** assessment of Apple's future stock price. The average price target they give to Apple** is 201$99, which is 443%。This data further confirms that analysts are optimistic about Apple's future, and also reflects their belief that Apple has great potential.
Analysts believe that Apple will benefit from the growth of iPhone sales and the continued momentum of the company's services division. In addition, the improvement of the environment will support the company's revenue.
A number of market research institutions believe that smartphone shipments will gradually recover in the next few quarters, and may achieve moderate growth next year. In addition, next year Apple will also release the Vision Pro headset, which is another new computing platform for the company since the launch of the Apple Watch in 2014, and the outside world is full of expectations.
Some analysts believe that thanks to the wave of artificial intelligence, technology giants still have the strength to fight next year and can continue to rise sharply. Dan Ives, an analyst at U.S. investment bank Wedbush, pointed out in a recent report that he expects a "wave" of AI applications to drive the stock prices of high-tech companies by nearly 30% next year.
To be clear, however, Apple is currently trading at around 29x earnings, which is well above the S&P 500's median P/E ratio of 17x. Toni Sacconaghi, an analyst at Bernstein, wrote in a note last month that it makes sense to pay a higher share price for Apple compared to other big tech companies that are expected to grow faster and have higher profit margins. ”
Coupled with the U.S. Department of Justice's lawsuit against Google, it's an element of uncertainty. According to the indictment filings, Google unfairly locked in its own dominance by paying Apple billions of dollars a year to lock in its position as the default search engine for the iPhone and Safari web browsers. If Google loses the lawsuit, Apple could lose billions of dollars in revenue.
All these factors point to the uncertainty of Apple's future. In this context, breaking through the high limit of market value of $3 trillion may be the last glory of the Apple empire
Everything needs to be decided in time.
Author |Amit Singh Zhang Jinjing.