Apple Inc. (NASDAQ:AAPL): This Is Huge for AAPL Stock

AAPL StockAAPL Stock to Gain from This Catalyst

Apple Inc. (NASDAQ:AAPL) stock had a tough 2016, but things seem to be looking up in one of the company’s business segments. Apple stock was an underperformer last year, but things could change for AAPL stock in 2017.

Apple Inc. released a note on Thursday saying that its “App Store” shattered records on New Year’s Day. Customer purchases touched $240.0 million, which made January 1, 2017 the App Store’s busiest day ever. The app developers earned $20.0 billion in 2016, up 40% from 2015. Since the App Store launched in 2008, developers have earned over $60.0 billion. (Source: “App Store shatters records on New Year’s Day,” Apple Inc., January 5, 2017.)

The news of a record-breaking holiday season and breakout app hits is a breath of fresh air for AAPL stock, as it has been under pressure from the news of reduced “iPhone” production.

Apple’s Senior Vice President of Worldwide Marketing, Philip Schiller, said, “2016 was a record-shattering year for the App Store, generating $20 billion for developers, and 2017 is off to a great start with January 1 as the single biggest day ever on the App Store.”

Customers broke all-time records in the 2016 holiday season with purchases from the App Store topping $3.0 billion in December. During the same month, Nintendo’s Super Mario Run game made history with more than 40 million downloads in just four days after its release. It was the most downloaded app globally on Christmas and New Year’s Day.  

Apple’s top-grossing apps included the games Monster Strike, Fantasy Westward, Clash Royale, and Pokémon Go.   

One of the top Apple stock analysts, Gene Munster, had already talked about the potential of “Apple Services” in his last research note in December. He was bullish on AAPL stock and maintained an “overweight” rating as the company makes its transition into a services company. Munster was confident that the Apple management team would figure out the best path to optimize the “Apple Services” story.

As per the latest annual report filed by the company, Apple Services posted the best growth of 22%, in contrast to iPhone sales, which declined by 12%; “iPad” sales, which declined by 11%; and “Mac” sales, which fell by 10%.

Apple stock was hit badly by the poor performance of its iPhone in the year 2016. But, as the new year has begun, investors may start warming up to the Apple Services growth story, which may send AAPL stock soaring.