Apple’s stock NASDAQ:AAPL has reached a new all-time high this week, driven by positive expectations surrounding the iPhone 16 and its integration with artificial intelligence (AI). This achievement seems to have reinforced investors’ confidence in the company’s ability to stay at the forefront of technology and solidify its leadership in the global market.
Analysts say the iPhone 16 marks the beginning of a supercycle that could redefine the smartphone landscape. Since Wednesday however we have seen some selling of the stock, with Apple shares down to $249 at time of writing.
iPhone 16 impact expected to be significant
Although a moderate overall sales growth of 0.4% is projected for 2024, the impact of the iPhone 16 is expected to be significant in the long term. This device, featuring AI-centered innovations, aims to sell 90 million units in 2025. Moreover, the projected performance of this model aligns with forecasts that Apple’s market capitalization will reach $4 trillion by the end of the year, highlighting confidence in its technological innovation strategy.
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Another key driver of Apple’s growth is the performance of its service ecosystem, especially the App Store, whose revenues have grown by over 15%. This increase underscores the company’s commitment to diversifying its revenue streams, making digital services a cornerstone of its business model.
“The expansion of these revenues reflects user loyalty to the Apple ecosystem, further strengthening its financial stability,” observed Antonio di Giacomo, an analyst with XS.
Bridgewater Associates raises its Apple stake
Simultaneously, the interest of major market players like Bridgewater Associates in increasing their stake in Apple demonstrates the company’s appeal as a long-term investment. These movements consolidate Apple’s reputation as a robust company capable of combining stability with significant growth potential in a highly competitive market.
Plans to launch a foldable iPhone in 2026 present an exciting opportunity to revitalize the market and gain a larger share of the industry. “This device and current advancements in AI could mark a new chapter in Apple’s technological evolution, solidifying its position as a pioneer in design and innovation,” di Giacomo explained.
Apple continues to showcase its ability to innovate and adapt to market demands, ensuring short-term growth and long-term stability. With the integration of artificial intelligence in the iPhone 16 and the diversification of its revenue streams, the company is well-positioned to lead the global market in the coming years. Apple’s strategic vision, coupled with interest from key investors, reinforces its status as one of the world’s most valuable and influential companies.
Who does Apple measure up against its peers?
Interestingly, AI-driven analysis from Bridgewise is showing a likely correction for Apple. The Bridgewise report is currently rating Apple an Underperform leaning towards a possible sell.
While the iPhone revenue seems to have been the highlight of the latest set of numbers from the company, there are a number of possible drag factors which could come into play in Q1. Wearables and home accessories revenues were down, and operating expenses are up on a year on year basis (6%).
Guidance from management also implied potential product revenue declines. This is before you factor in FX rates which are hitting Apple’s margins in some key markets, like China.
What do momentum indicators tell us about Apple stock?
Looking at the medium term trend for Apple stock, using proprietary indicators from Trend Intelligence, we can see some very bullish patterns emerging for Apple. This gives Apple an 83% positive momentum indicator.
The top three charts are all pointing towards further gains for Apple. You can see the most recent green candle in the top chart is above the medium length moving average in yellow. It is also well above the Japanese cloud (shaded in blue) AND Trend’s blue delay line is also above the Japanese cloud. This is a very positive picture for Apple.
The only neutral indicator is the bottom chart, where the red M* line is just below the blue signal line, but this looks marginal at the moment.
