As Apple Hits All-Time High, What Takes It Higher?

Investing

Published: July 16, 2024 7:10 am

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Now that Apple Inc. (NASDAQ: AAPL) stock has come back and hit an all-time high, what takes it higher?
Are its problems in China behind it? Will the launch of the iPhone 16 provide a boost?

Apple Inc. (NASDAQ: AAPL) shares hit an all-time high of $237.23, partly due to optimistic reports from research firms Loop and Morgan Stanley. Both rate Apple as a “buy” and have price targets as high as $300. The price is a relief for shareholders who watched the stock struggle earlier in the year, primarily because of sales in China and worries too few consumers would upgrade from the iPhone 14 to the iPhone 15. Now that Apple has come back, what takes it higher?

First, Apple reports earnings on August 1. The company needs to be better than the same quarter last year, which showed weakness in iPhone sales and China revenue. In the prior quarter, total revenue dropped 4% to $90.8 billion. Greater China sales fell from $17.8 billion in the year-ago quarter to $16.4 billion. iPhone revenue declined from $51.3 billion to $46 billion. Although non-hardware sales are improving, more is needed to compensate for iPhone problems, and that is unlikely to happen.

Apple also needs to demonstrate that its problems in China are behind it. Some research shows that its market share rebounded from early in the year. Yet, it still needs to beat figures from local smartphone companies like Oppo.

The launch of the iPhone 16 in September is the most significant catalyst for a further increase in the share price. Apple has announced it will have several advanced artificial intelligence features. However, it is still being determined what those are for consumer demand to be exceptionally high in September and October. Worries about the iPhone 16 will fall away if those rise sharply.

Apple’s shares have upside. Now management needs to perform.

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