Apple Stock Nears Record High on New Product Lineup

AAPL StockRumored Product Release Buoys AAPL Stock

Apple Inc. (NASDAQ:AAPL) is in the headlines again, and Apple stock is on its way to another record high as excitement builds around the expected release of new products. AAPL stock gained one percent to close at $141.46 on Monday and is on its way to posting another day of all-time highs.

Reports are making the rounds that Apple Inc. may launch new products this week, which could be new “iPad Pro” models. This could include an all-new 10.5-inch model with slimmer bezels, as well as updated 9.7-inch and 12.9-inch versions. There could also be the launch of a larger “iPhone SE.” (Source: “Apple expected to Announce New Products as Soon as Next Week, Supply Chain Sources Say,” MacRumors, March 13, 2017).

AAPL stock has gained a phenomenal 22% year-to-date as investors get more bullish on the prospects of “Apple Services” and the rumored launch of the “iPhone 8” with support for augmented reality (AR). The focus on AR is likely to strengthen the Apple ecosystem and, together with the new hardware launches, makes room for more Apple stock price increases in the coming weeks.

In contrast, the broader S&P 500 Index could post a gain of six percent since January this year.

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Chart courtesy of StockCharts.com

Apple Inc.’s AR Plans to Boost Apple Stock

Another recent report points out how Apple CEO Tim Cook is betting on augmented reality. Apple has built a team by combining the strengths of its hardware and software experts, as well as hiring outsiders to make its AR dream a reality. The team is run by a former executive of Dolby Laboratories, Inc.(NYSE:DLB) and includes engineers who worked on the “Oculus Rift” by Facebook Inc (NASDAQ:FB) and “HoloLens VR” headsets by Microsoft Corporation (NASDAQ:MSFT). (Source: “Apple’s Next Big Thing: Augmented Reality,” Bloomberg, March 20, 2017.)

Apple stock was in the limelight earlier when Warren Buffett’s Berkshire Hathaway Inc. raised its stake in the company. Buffett more than doubled his stake in the smartphone maker, and the major reason he liked it was the “stickiness” of the Apple iPhone.

With the introduction of AR smartphones, this stickiness is likely to go up in the coming years. AR is the computing platform of the future, which has the potential to even replace the iPhone. If Apple takes the lead in AR devices, it may well chart another growth path for itself, which will take AAPL stock to another level.

Apple CEO Invests in China

Tim Cook was in China last week, and the company announced that two additional research and development (R&D) centers will be set up in Shanghai and Suzhou. Cook attended the China Development Forum that began last Saturday, and made his first speech there centered on innovation and corporate social responsibility.  (Source: “Apple Pledges New Centers in China as Cook Set to Address Major Government Conference,” The Wall Street Journal, March 17, 2017.)

China contributes over 20% to Apple’s revenue, and it is critical to the growth of AAPL stock in the future. But China has been a challenging market for the company, as was clear in the latest results posted by Apple Inc. The company’s stock did get a boost from the record-high quarterly revenues that were reported, but there were concerns surrounding growth in Greater China.

Apple’s fiscal first-quarter sales rose in every region except in China, Hong Kong, and Taiwan. The sales in Greater China fell by 12%, to $16.2 billion for the December quarter, as local companies like OPPO Electronics and Huawei Technologies Co., Ltd. continue to eat into Apple’s market share.

However, investing in the new R&D centers and working with Asian companies to develop new and advanced technologies and services may turn the tide in Apple’s favor and ease the pressure on AAPL stock a bit.

If you have been using Apple devices, you probably love most of them, given the fact that they are so simple to use. They are pretty useful and addictive too. This makes it more exciting to see what new features the company can add to its existing product lineup. Right now, Apple stock investors are quite bullish, and the trend is expected to continue for days to come.


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