“For the past few years, Apple shares have been judged by one metric on Wall Street: iPhone unit sales. As iPhone growth has fluctuated, so has the stock price,” Neil Cybart writes for Above Avalon. “Analysts have been infatuated with quarterly iPhone sales gyrations and the impact they may have on Apple earnings and the stock. However, things are changing. The iPhone’s influence over Apple’s stock is subsiding on Wall Street.”
“Over the past year, AAPL shares have outperformed the overall market. There are now questions regarding what has driven a 53% increase in Apple’s stock price from the bottom experienced in May 2016,” Cybart writes. “Is Apple’s services narrative finally catching on Wall Street? Are investors becoming increasingly optimistic about iPhone sales prospects?”
“It may be easy to assume Apple services or new iPhones may have been responsible for much of Apple’s latest stock outperformance. However, I don’t think those factors alone were able to drive a 50% increase in Apple’s share price,” Cybart writes. “My theory is that the iPhone no longer has the same kind of influence over Apple shares as it once did. Instead, Apple has turned into a balance sheet optimization story on Wall Street. Apple’s growing net cash balance (now standing at an all-time high of $158 billion) has taken the place of iPhone unit sales growth as the most influential variable impacting Apple shares.”
Much more in the full article – recommended – here.
MacDailyNews Take: It took years, but people are finally grasping the sheer enormity of Apple’s cash mountain and, finally, valuing it.
The fabulous Apple cash machine – May 6, 2017
Apple’s unequaled $250 billion cash pile draws calls for buybacks, acquisitions as President Trump’s tax revamp looms – May 1, 2017
Apple cash balance is near $50 per share – May 1, 2017
Apple has turned into a cash-producing machine investors should not ignore – March 23, 2017
If Apple’s cash hoard was its own company, it would be the 13th largest in the world – January 31, 2017
Apple’s cash mountain enough to buy every major sports team in the world – with $60 billion left over – November 4, 2015
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]