Here's Why Apple's Stock Is Booming ...

In one of the more under reported stories of the year, Apple’s stock has made an impressive comeback.

As of this writing, it’s trading at $US628, which is up 42% on a year-over-year basis. Over the same period, the Dow is up ~20%, and the NASDAQ is up less than 10%.

Why is Apple on the comeback trail? It’s not rocket surgery. It’s all about the iPhone.

Yesterday, Brian Blair at Rosenblatt Securities said, “The supply chain is buzzing primarily about iPhone units for the back half of the year, which we believe are stronger than expected at north of 100 million units” for the second half of the year.

Blair was in Taiwan last week meeting with sources that work with Apple to manufacture its products. He came away pretty bullish on Apple’s second half of the year.

He says Apple will make a redesigned 4.7-inch iPhone, and a 5.5-inch iPhone. He expects those to be blockbusters. People tend to want to buy the newly designed model versus the off-year “S” models. In other words, people like to buy an iPhone 5 more than an iPhone 5S, since the 5 is new.

In addition to the iPhone, Apple is expected to release an iWatch at the end of the year. Blair estimates Apple sells18-21 million iWatches, which will pick up the slack for Apple’s dying iPod business.

Blair isn’t the only analyst pounding the table about Apple’s second half of the year. In March, ISI said, “the ‘mother lode’ of all Apple upgrade cycles” is coming this fall. It estimated Apple could sell over 100 million iPhones in the second half of the year, too.

In general, analysts think Apple is going to produce an insane year starting next week at its WWDC conference where it will reportedly unveil a redesigned Mac operating system, a new health-oriented iPhone app, and a new home automation platform.

When Apple crashed after the release of the iPhone 5, a few things were happening. Analysts cut EPS estimates because they thought the iPhone business was going to slow down. They were right on both counts. At the same time, Apple was truly entering the post-Steve Jobs era, and no one knew what to expect.

Apple didn’t release any products, and there was not talk of Apple releasing any products, so sentiment got very negative on the company.

This year, Apple has new products in the pipeline, and analysts are expecting big things from the iPhone.

Thus, the stock is booming right now.

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