Apple (AAPL) bulls have been hit with an unsettling theory in recent days: The company will get clobbered by a bad back-to-school season as consumers tighten their belts. AmTech’s Shaw Wu scoffs at this, arguing that Apple may prove largely immune to a consumer slowdown:
Disturbance in the macroeconomic environment is disproportionately within lower-income demographics and financial institutions. This could certainly spread, but we believe AAPL’s business will remain strong in the near- to medium-term. Enough high-end consumers are still buying tech, though commodities inflation could pressure future margins.
So Apple isn’t seeing a big slowdown right now, but might soon? Hard to see how the stock charges higher in the face of that. Also, banks and credit card companies are starting to see more and more delinquencies and defaults in wealthier demographics. If the middle class starts missing mortgage payments, we doubt buying iPhones will be high on their list of priorities.
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