Apple Shares Up 60%, Await More iPhone 12 Data

By Douglas A. McIntyre Updated Nov 4, 3:34PM EDT · Published Nov 23, 8:01AM EST

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Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) has a market cap of $2 trillion, the largest of any company in America. Shares of the iPhone maker have surged 60% this year, compared to 10% for the S&P 500. Despite its size, Apple is a one-product company, as far as many investors are concerned.

Apple recently reported quarterly revenue of $64.7 billion, with net income of $12.7 billion. It sold $9.0 billion worth of Macs, $6.8 billion of iPads and $7.9 billion of accessories and home equipment, and its fast-growing services business posted revenue of $14.5 billion. However, the iPhone’s revenue was by far the largest of any product line at $26.4 billion. Wall Street is counting on future iPhone revenue to keep Apple’s stock moving upward.

For a period, investors believed that they could count on the Services business to be Apple’s growth driver. It was a fair assumption. This business includes the App Store, the iCloud service, iTunes, Apple TV and the Apple Pay commerce business. Services is Apple’s play to move beyond hardware.

The primary reason Apple’s stock has surged, however, is hope for iPhone 12 sales. The latest generation of the smartphone is considered a larger improvement over past models than has been true in years. It may begin what analysts call a “supercycle,” in which much of Apple’s iPhone owner base upgrades versions they have had for several years. If this happens, iPhone sales may hit an all-time record and give an extraordinary boost to revenue.
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iPhone sales are expected to be strong, particularly in the short term, for two reasons. The first is that the iPhone 12 will work on new superfast 5G networks. The second is that the iPhone 12 was released just ahead of the holidays, when consumer electronics sales are always at an annual peak.

How many iPhone 12 smartphones does Apple need to sell to keep investors happy? Certainly several million by the end of the year. Analysts have a broad range of estimates.

Sales will need to be at the high end of those to keep Apple’s stock moving in a positive direction.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.