Apple Stock Set to Soar on Positive Financial Results & Optimism
The past few months may have been a rough for Apple Inc. (NASDAQ:AAPL), but I’m not worried. Since the mid-summer, shares of AAPL stock experienced a quick and solid turnaround, soaring up by 12%. But what does the company have in store in the New Year? Let’s take a look at Apple’s stock outlook for 2016.
Apple Stock Outlook 2016
It’s amazing when you think back to where Apple stock was only a month ago, as the tech company found itself struggling to tread water while other giants in its field such as Alphabet Inc .(NASDAQ:GOOG), Amazon.com, Inc (NASDAQ:AMZN), and Facebook Inc. (NASDAQ:FB) soared to unprecedented heights.
Now compare that to today, where the Apple stock price is sitting just eight percent under its all-time peak level set back in April. For anyone that thinks this latest AAPL stock price surge is simply a market correction, think again. These latest numbers are indicative of a company which is about to break new records in its stratospheric rise.
Indeed, if these trends continue, I wouldn’t be surprised to see the Apple stock price rise to $200.00 a share. A wise investor might realize this could be the time to take a second look at AAPL stock. Because if current price movements continue, a well-placed investment now could mean huge returns in the future.
Think of it this way: if you could count yourself amongst the lucky people who a saw a good buying opportunity when Apple stock was down in the dumps back in August, you would be seeing a phenomenal 35% return on your investment today.
It doesn’t take an MBA to recognize a winning stock, and AAPL certainly fits the bill.
It’s at this point that you’re wondering why the Apple stock price made a comeback and became a stock market darling again seemingly overnight.
It’s quite simple, really. Apple’s quarterly financial report announced last week was more than spectacular, and there’s nothing like positive numbers to get investors and analysts alike excited. (Source: “Apple Reports Record Fourth Quarter Results,” Apple, October 27, 2015.)
Sales of iPhones surged by a robust 36%, led by a wave of strong demand in China. (Source: “Apple’s profit soars 31% on the back of strong iPhone and Mac sales,” CNN Money, October 28, 2015.) This news also had the spinoff benefit of reminding investors that the Chinese stock market crisis and ongoing economic slowdown is not necessarily as big a problem as previously believed for tech giants such as Apple. Led by new products like the Apple Watch and a revamped Apple TV, the AAPL stock price is riding a wave of bullishness in its latest market rally.
Aside from exciting new products, one should not forget about Apple’s truly massive store of liquid cash, which is now sitting at approximately $206 billion. The tech giant can outspend nearly all of its competitors, in existing or future markets, if it choses to do so.
What’s In Store for Apple Stock in 2016?
Now, I think that by any reasonable metrics Apple is among if not the most successful company in the world. But that doesn’t mean it can ride on past achievements and rely on market momentum to carry the AAPL stock price higher.
It’s going to take real, solid results. And that means convincing analysts and Apple investors that AAPL is going to keep rising. The good news is that Apple seems well-positioned to rise higher than ever.
Let’s step back and take a quick look at how AAPL stock has performed from a historical perspective. Would you be surprised to know that Apple stock is easily one of the best investments you could have made in the last ten years? The AAPL stock price has in fact skyrocketed by more than 1,000% since 2005, and there is no indication that this trend will do anything but continue into the future.
If that’s enough to convince you, then consider that the company is also rapidly expanding into lucrative new market segments which did not even exist just a few years ago. A notable example would be the rise of wearable fitness devices, a niche in which Fitbit Inc. (NYSE:FIT) is the current king, but against which the Apple Watch is poised to be a strong competitor. (Source: “Fitbit Drops as Wearables Maker Plans Further Stock Offering,” Bloomberg, November 2, 2015.)
Considering the significant amounts of cash which Apple can downplay when it comes to research and development, I wouldn’t be shocked if it simply overwhelms Fitbit in the fitness band market and takes its place as a market leader. While Fitbit has the edge by virtue of being the first in the market, there is no other discernible advantage which will keep Apple from winning in the future, should it choose to battle for market share.
The Bottom Line for Apple Investors
If you’ve been paying attention, you’ve come to the undeniable conclusion that the AAPL stock price is not only bouncing back from a rough time this summer, but could be poised to soar in value. With solid financial results, a good track record of substantial year-on-year rises in stock value, and strong potential to edge out competitors in exciting and emerging new fields, AAPL stock is well-placed for strong growth. It’s no wonder that I remain bullish on the Apple stock price.