Apple Fundamentals
Apple share price has not been spared in the ongoing sell-off of American tech companies. TheAAPLstock is trading at $159, which is about 12.2% below its highest level this year, meaning that it is in a correction zone. However, it has outperformed other FAANG and technology companies. Apple, like other American companies, is facing significant challenges as the current geopolitical events continue unfolding. For example, the cost of building key products like the iPhone and iMac has jumped sharply because of the rising commodity prices and wages.
The company is also battling the significant challenge posed by the ongoing chip shortages. While Apple now uses its own chips, the chips are produced by other manufacturers like Taiwan Semiconductors. In the most recent quarter, the company said that the chip shortage had cost it over $10 billion in revenue. Meanwhile, the company’s biggest manufacturer has been forced to shut down in China because of the ongoing Covid-19 crisis and the country’s COVID-Zero policy.
Still, there is a likelihood that the Apple stock price will continue doing well. For example, its services revenue is pretty stable and could help it offset the other challenges it is facing. At the same time, analysts expect that the company could increase the prices of its services gradually without losing customers.
Another catalyst is that Apple has a remarkable balance sheet, meaning that it could keep rewarding shareholders as the stock retreats. It could do so by hiking its dividends and via share repurchases. Meanwhile, Apple’s growth will continue albeit at a slower pace. Its annual revenues have risen from $229 billion in 2017 to more than $378 billion in the trailing twelve months. Its annual net income has also crossed the $100 billion mark.
Apple share price forecast
Turning to the daily chart, we see that the APPL stock price has been in a bearish trend in the past few weeks. A closer look at the chart shows that it has formed a descending channel highlighted in black. The price is now within this channel, which can be considered a bullish flag pattern.
However, the 25-day and 50-day moving averages on the daily chart have made a bearish crossover pattern while the MACD has moved below the neutral level. Therefore, there is a likelihood that the stock will keep rising in the near term as bulls target the upper side of the descending channel at around $170. The bullish view will be invalidated if the stock manages to move below the lower side of the channel at around $150.
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