AAPL: #1 Most Valuable Company Again. Buy Now?
Return Of The King.
In the latest sign of improving investor sentiment over its growth and position with artificial intelligence, $Apple(AAPL)$ has overtook Microsoft Corp. to regain its title as the world’s most valuable company.
The milestone followed a blistering rally, including Apple’s biggest 3-days advance since August 2020. (see below)
In the 3 days, $Microsoft(MSFT)$ was rallying also, but if fell “short” when compared to Apple’s.
And so, on Thu, 13 Jun 2024, Apple Inc closed with a market capitalization of $3.285 trillion, versus Microsoft at $3.282 trillion.
This is the first time since January that Apple closed with a higher market value than Microsoft, and it represents the latest reshuffling of the ranks of Wall Street’s largest stocks.
Who would have thought that just earlier this week, Apple closed in third place behind $NVIDIA Corp(NVDA)$ .
Expert Weigh-In.
Wayve Capital Management, Chief Strategist, Rhys Williams has said:
People have a high degree of conviction that they (AAPL) will be an AI winner.
It seems like this is a market where if you’re an AI winner, you’re being bid up a lot.
He assumes both Microsoft and Apple will be somewhat of a horse race for the foreseeable future with Nvidia also in contention.
The Cupertino, California-based company rose +0.6% on Thursday, its 3rd straight positive session, which also included the largest one-day percentage gain since November 2022 on Tuesday. (see above)
The 3-days jump of about +11% added a staggering $323.9 billion to its market capitalization.
That’s bigger than all but a handful of components (listed companies) in the S&P 500 Index.
In contrast, Microsoft rose a very modest +0.1% on Thursday.
Apple’s Catalyst.
The catalyst for the gains was Apple’s AI-focused Worldwide Developers Conference (WWDC) presentation on Mon, 10 Jun 2024.
That fueled hopes that customers will pay up for the next generation of iPhones, spurring a long-awaited rebound in growth.
For Apple’s Q2 2024 earnings, revenue fell -4.3%, its 5th contraction in the past 6 quarters.
$Bank of America(BAC)$, Analyst, Wamsi Mohan has mentioned:
AI functionality is likely to drive a multi-year upgrade cycle from faster replacement, more switching, and ASP (average selling prices) increases.
Apple Intelligence can drive a significant upgrade cycle and current consensus estimates are too low.
The AI event came in the wake of a positive quarterly report in early May, when Apple also announced a $110 billion buyback plan, the largest buyback program in US history.
Apple’s Roundup.
Even with the recent strength, concerns about growth have capped Apple’s gain relative to the rest of big tech.
Thursday’s rally pushed Apple’s YTD gain in 2024 to 15.41% (as of 13 Jun 2024 closing), below the Nasdaq 100 Index’s 18.33% advance.
Stocks with more concrete AI exposure — including Microsoft, Amazon.com Inc., Alphabet Inc., and Meta Platforms Inc. — have all outperformed Apple this year. Nvidia has soared more than +160%. (see above)
My viewpoints: (mine only)
Apple’s venture into AI has been the main catalyst in whipping this IT giant back into every investor’s radar.
As AI-availability is from iPhone model 15 Pro onwards, it ensures demand for its subsequent generations of iPhone.
Similarly, for its other peripherals eg. iPad or MacBook, AI capabilities come with its M1 semiconductor chip, also “guarantee-ing” future sales.
There is one Apple product that seemed to have dropped off investors’ and writers’ radar and it could be a dark horse for Apple. (see below)
Its much touted and anticipated reality augmented goggle (Apple Vision Pro) is finally available for international shipment from 28 Jun 2024 onwards. (see above)
Pre-orders began from 13 Jun 2024 for customers in China, HK, Japan & Singapore for 28 Jun delivery.
Pre-orders for Australia, Canada, France, Germany and the UK will begin from 28 Jun 2024, for 12 Jul 2024 delivery.
At the same time, virtual sports competitions are being considered for the Olympics.
The Olympic Esports Series (OES) is a global virtual and simulated sports competition created by the International Olympic Committee (IOC) in collaboration with International Federations (IFs) and game publishers.
Featuring both professional and amateur players competing across various games.
The first Olympic Esports Week took place in Singapore from June 22 to 25, 2023.
Additionally, the Olympic Virtual Series included virtual sports events such as baseball, cycling, auto racing, rowing, and sailing, running from 13 May to 23 Jun, 2024.
If Apple Inc is able to stay true to Vision Pro’s sales forecast, wouldn’t you agree that this is a dark horse in the making?
With competition in the virtual space set to proliferate and gain global acceptance, Apple’s Vision Pro might just become the defacto standards, if they play their cards and product right !
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