AAPL Stock to Go Higher on iPhone 8 and Services Growth
Apple Inc. (NASDAQ:AAPL) is enjoying a phenomenal week, with AAPL stock hitting another record high and closing at $144.12 on Wednesday. The past few days also saw bullish reports on Apple stock, stating that there is a good possibility that the shares will touch $200.00 in few years time.
But, at the moment, the price is being driven by strong expectations surrounding the Apple “iPhone 8.” The bullish sentiment is so strong that there does not seem to be any impact of the Samsung “Galaxy S8” launch either. The phone is touted to have better looks and features than the Apple iPhone but, at the moment, nothing seems to have any negative impact on AAPL stock.
Venture capitalist firm Loup Ventures has a price range of $180.00 to $200.00. (Source: “Apple expert Gene Munster: This is ‘the golden opportunity’ to buy Apple,” CNBC, March 29, 2017.)
Apple’s market capitalization is now over $750.0 billion and getting closer to the $1.0 trillion mark. AAPL stock has gained about 24% year-to-date as compared to the 5.5% return posted by the S&P 500 and about 10% by NASDAQ. Apple stock closed at a record high of $143.80 on Tuesday.
Chart courtesy of StockCharts.com
Apple made headlines last week when it released the “(PRODUCT)RED” special editions of the “iPhone 7” and “iPhone 7 Plus” besides launching a new 9.7-inch “iPad” featuring Retina display. But there was something more important that it announced.
Apple also introduced “Clips,” a new way to create expressive videos on “iOS.” Clips is a new app that that makes it quick and easy to create videos on the iPhone and the iPad. (Source: “Apple Introduces Clips: The Fun, New Way to Create Expressive Videos on iOS,” Apple Inc., March 21, 2017.)
Clips also introduces “Live Titles,” which is another breakthrough feature that lets users create animated captions and titles using just their voice. There are various fun effects like comic book filters, speech bubbles, and full screen animated posters.
The video editing app is an important move by Apple, as it could help attract the younger crowd that mostly edits and shares videos using apps by Snap Inc (NYSE:SNAP) or Facebook Inc (NASDAQ:FB). It will arrive in the “App Store” sometime next month. Although it may not pose any threat to the other existing social media platforms, it may give another reason to users of Apple’s messaging platform to stick around the Apple ecosystem.
Apple Inc. also made a move last week, which holds big potential in the coming future. Apple acquired “Workflow,” which is a powerful automation app for iOS. Workflow is a tool that lets users connect different apps and functions within apps in strings of commands to automate repetitive tasks. (Source: “Apple has acquired Workflow, a powerful automation tool for iPad and iPhone,” TechCrunch, March 22, 2017.)
The Workflow app simplifies grouping together tasks to perform custom actions. The app had won an Apple Design Award in 2015, as it brilliantly used the iOS accessibility features. Moreover, it has an outstanding implementation for “VoiceOver,” which opens numerous possibilities in for integration with “Siri,” Apple’s digital assistant. Although it will take some time, such deals are instrumental in keeping users engaged with the Apple ecosystem. And this is good news for Apple stock.
Apple Services growth is driven primarily by App Stores, hence it is important that the company keeps investing in its most promising property. Apple Services—which includes the App Store, “iTunes,” “iCloud,” “Apple Music,” and “Apple Pay”—hit revenue of $7.17 billion last quarter. Apple Services accounted for more than 11% of Apple revenue in 2016 and about 18% of the profits. Apple CEO Tim Cook expects the Services business to grow as big as a Fortune 500 company by 2017.
These developments clearly point in the direction where Apple Services is going to spring up positive surprises in the year ahead, and should push AAPL stock higher. This may be a time to rejoice for Apple stock investors.