Apple shares hit a new all-time intraday high on Tuesday, continuing the rally leading into and following the stock’s 4-for-1 split.
Year-to-date Apple is up 80%, while the S&P 500 is up about 8%. The move has some analysts on their heels as they aim to explain what’s happening to their clients.
In a research note to clients, BofA analyst Wamsi Mohan highlighted possible factors behind the stock’s “unprecedented strong run of outperformance vs. the broader market.” A recent “inflow of retail investors” suggests momentum as a factor, he said.
“Our conversations with institutional investors suggest that Fear Of Missing Out (FOMO) is not yet at work given the relatively quick rerating and concern that fundamentals can’t support continued upside,” he wrote.
“Analyzing the past few weeks of trading data suggests a strong inflow from retail investors, suggesting MOMO (momentum) is the strongest attributable factor,” he said, while warning that “momentum can cut both ways, especially given risk to Sep/Dec qtr estimates (particularly on high end iPhones).” Though he noted that “in the short term momentum can trump valuation.”
MacDailyNews Take: Amid the Apple rally, Mohan raised BofA’s Apple price target to $140 while maintaining a “Neutral” rating.