Why Apple escaped Tuesday's Nasdaq meltdown

An analyst reiterates his very bullish view on the company's shares.

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A young woman wearing an Islamic tradition headscarf and jeans sits in an urban environment with an apple in one hand and her phone in the other with a smile on her face.

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

What happened

Long-suffering tech stock investors had to endure yet another painful trading session on Tuesday. Apple (NASDAQ: AAPL) shareholders saw their company lose nearly 2% of its value. That performance was relatively good on a day when a profit warning from Snap Inc (NASDAQ: SNAP) resulted in the social media stock's worst trading day ever, crumbling by 43% and dragging many other tech titles deep into the red along with it.

So what

Limiting the damage to Apple was a glowing research note from Bank of America. The big lender's analyst Wamsi Mohan reiterated his buy rating on the star tech stock, and his $200 price target.

Mohan believes that the company has several strong tailwinds, including growth in user count and App Store revenue improvement.

The analyst was particularly encouraged by developments with the App Store. Revenue for the mobile marketplace rose a robust 7% year over year in the January-through-April period of 2022.

Much of this comes from the Chinese market, which is apparently home to a great many eager Apple users in search of something good to play. Mohan cited data indicating that gaming apps alone have seen growth of 13% to date in the company's current quarter.

Now what

The analyst explained in his note that the "Chinese government lifted its nine-month new gaming licensing ban, approving 45 titles".

Therefore, he concluded, "Given the slightly favorable stance from regulators and ongoing lockdowns in China, we potentially see upside to the China App Store growth in [the fiscal second half of 2022]."

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

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman 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.

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