- Apple’s stock charged its way up to $US212 in premarket trading Wednesday even after the company reported another decline in iPhone sales.
- It cements a $US327 billion rally in Apple’s market cap since January 3, when Apple issued an explosive sales warning on holiday trading, blaming weak iPhone sales in China.
- Numerous analysts think the downturn in iPhone sales has bottomed out.
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Apple’s stock has been on a steady recovery rally in recent months, and it looks set to be cemented by a Wall Street vote of confidence in the iPhone maker’s latest earnings.
Since hitting an 18-month low of $US142.19 on January 3 – directly after Apple issued an explosive sales warning on holiday trading after iPhone sales took a hit in China – Apple’s stock charged its way up to $US212 in premarket trading on Wednesday.
If these gains hold during normal trading hours, Apple’s stock will close on a high not seen since November.
The $US212 premarket share price marks a $US327 billion rally since January 3, putting Apple’s market cap at $US999.7 billion. That would put Apple close to the trillion-dollar valuation it broke last year as it became the world’s most valuable company.
Wall Street responded warmly to Apple’s second-quarter earnings, published Tuesday. The company beat expectations, posting revenue of $US58 billion with higher-than-forecast iPhone and services sales.
Some analysts now think the downturn in iPhone sales has bottomed out after Apple’s brutal earnings warning in January, described by Wedbush at the time as “the darkest day in the iPhone era.”
While iPhone sales fell $US7 billion year-on-year in Q2, Wells Fargo said in a note to clients that it was “now seeing indications stabilizing / bottoming iPhone demand.” Bank of America Merrill Lynch agreed, saying, “iPhones/China have bottomed out and are improving.” Credit Suisse also said the iPhone “likely bottomed.”
The view was echoed by Apple CEO Tim Cook, who struck a relieved note on an earnings call Tuesday. “We certainly feel a lot better than we did 90 days ago,” he said.
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