Why Apple stock jumped on Monday

Numerous reports were decidedly bullish for the iPhone maker.

| More on:
A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Apple (NASDAQ: AAPL) climbed higher on Monday, adding as much as 4.1%. As of 12:57 p.m. ET, the stock was up 3.1%. 

The catalysts that sent shares higher were several reports that were good news for Apple shareholders. 

So what

A report over the weekend suggested that the iPhone maker is looking to increase its production outside China, according to The Wall Street Journal. Detractors have long derided Apple's heavy reliance on China to assemble its popular electronic devices, which many believe is the company's Achilles' heel. The report cited China's "Zero-COVID" policy among other factors. Apple already has manufacturing operations in Vietnam and India, which could eventually get a greater share of the company's device quotas. Having alternative facilities would certainly work in Apple's favor, giving the company greater flexibility.

Well-known Apple analyst Ming-Chi Kuo suggested that the tech giant plans to release the latest version of its HomePod smart speaker near the end of 2022. The company has lagged rivals in the smart speaker market, but could eventually take market share if it can crack the code regarding utility, design, and price point. Previous rumors suggested that Apple was working on devices with viewing screens and cameras, though these reports are, as yet, unconfirmed. 

Finally, UBS analyst David Vogt reported that a recent survey of 7,000 smartphone users suggests that demand for the iPhone is rising in China, with purchase intent up 6% year over year, marking its highest level in six years, according to the UBS Evidence Lab. The iPhone 13 is taking share from Chinese smartphone providers. The news was mixed, however, as purchase intent in the U.S. is down 4%. 

Now what

Apple stock has slumped 22% so far this year, dragged down by the bear market, inflation, and the specter of a recession hanging overhead.

These fears stand in stark contrast to the company's fiscal second-quarter results, as Apple posted record revenue for the quarter that ended March 26. The results were fueled by an all-time revenue record from its services segment and second-quarter revenue records for the iPhone, Mac, and wearables, home, and accessories segments. 

Given the company's continuing strong execution, I suggest Apple stock is a buy at this level.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Danny Vena has positions in Apple. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on International Stock News

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
International Stock News

5 proven investment strategies you can use to ride out a recession

Turn an economic crisis into opportunity with these investing strategies.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

Think you can’t afford to buy Tesla shares? Think again…

Tesla will be splitting its stock... again. Here's what we know.

Read more »

A young couple in the back of a convertible car each raise a single arm in the air whilst enjoying a drive along the road
International Stock News

Why Tesla and other EV stocks rocketed higher in July

Tesla surprised investors with better-than-expected second-quarter results.

Read more »

A man with a scrappy beard and wearing dark sunglasses and a beanie head covering raises a fist in happy celebration as he sits at is computer in a home environment.
International Stock News

5 tech stocks sending the Nasdaq higher on Wednesday

A combination of solid earnings and investor optimism has many of the year's losers seeing some gains.

Read more »

A woman in colourful outfit holds up a phone to take a selfie.
International Stock News

Why Apple stock popped today

The iPhone maker has its eye on another revenue stream.

Read more »

Happy woman on her phone while her electric vehicle charges.
International Stock News

Why Tesla shares bounced ahead of its stock-split vote

The market will find out Thursday if shareholders have approved the electric vehicle company's 3-for-1 stock split.

Read more »

A family of three sit on the sofa while watching television.
International Stock News

Netflix shares rose 29% last month, but the stock is still cheap

Here's why Netflix gained nearly 30% last month, and why the stock still has room to run much higher.

Read more »

a graph indicating escalating results
International Stock News

Why did the Nasdaq share price rocket 19% in July?

The financial stock surged on strong earnings, among other factors.

Read more »