Shares of Apple (NASDAQ: AAPL) rose for the eleventh consecutive day in the second half of March to come close to erasing all losses suffered earlier this year.
Investors Seeking Shelter in Times of Market Turmoil
The last time Apple recorded such a winning streak was in 2003 when its shares rose for 12 straight days, driven by sales of the then-popular iPod.
In addition to Apple, other tech stocks in the industry also gained ground, including Amazon, Meta, Netflix, Alphabet, and others, helped by the ongoing ceasefire negotiations between Russia and Ukraine.
Apple’s market cap currently stands at roughly $2.9 trillion.
“Apple is a bedrock of strength and overall iPhone and services demand is helping the stock to power back towards the $3 trillion area code,” said Wedbush analyst Dan Ives in a client note.
Tech leaders have shown resilience amid a challenging period that involved rapidly-rising inflation and hiked interest rates, urging investors to turn toward safe-haven, low-risk assets. On the other hand, less established, emerging companies have taken a heavy blow during that period, losing millions of dollars.
“Once the Fed started its rate liftoff this was a bright green light to own tech stocks,” added Ives, who is bullish on Apple’s stock. “Many investors were caught off guard by this rally and now are playing catchup with Cupertino front and center.”
However, Apple has also felt the effects of the geopolitical tensions and looming inflation, forcing the tech giant to reportedly reduce the production of its iPhone SE due to weaker demand. Media reports said that Apple is planning to cut production of the iPhone SE by 20% this year, in addition to production cuts for the entire iPhone lineup and AirPods.
However, Wall Street analysts are still bullish on Apple as the recent channel checks show the tech titan is enjoying robust demand for iPhone 13.
In March, Bloomberg reported that Apple is planning to launch a new subscription service for its devices, which could allow consumers to buy iPhone and other Apple products via a subscription method similar to the monthly app fee.
The move would allow Apple users to subscribe to its devices for the first time ever as this model was only used for the company’s digital services. However, the project is still in development, the report said.
The new subscription service would mark a significant strategic shift for Apple which has been selling its devices at full cost for the past 15 years, or in some cases, through installments and carrier subsidies.
The service could help Apple drive revenue further as it would allow them to buy expensive Apple products by paying small monthly fees, instead of having to spend thousands of dollars at once.
The iPhone accounts for the largest portion of Apple sales, contributing almost $192 billion last year – more than 50% of the company’s revenue.
The new subscription model is meant to let users pay for their new Apple devices the same way they pay for iCloud and Apple Music subscriptions. Also, the service will not be the same as typical installment programs that simply split the price of the product across 12 or 24 months. Instead, users would pay a yet-to-be-determined, depending on which device they choose to purchase.
Furthermore, Apple is considering allowing subscribers to swap out their old Apple devices for new ones as the company launches new versions of its flagship products each year. The service is expected to launch at the end of the year or in 2023, according to the Bloomberg report.
Last year, Apple was reported to be working on its own “buy now, pay later” service for all Apple Pay transactions, which could also launch over the coming months.
Another scoop by Bloomberg noted that Apple is also working to bring more financial services in-house, a report that sent shares of financial companies lower. These services include payment processing, loan risk assessment, fraud analysis, credit checks, etc.
Apple stock price surged for 11 consecutive days in March on the back of a sector-wide rebound in tech stocks. Analysts continue to heap praise on Apple given the company’s robust financials.
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