Apple (AAPL) Stock Trades Up, Here Is Why

What Happened?

Shares of iPhone and iPad maker Apple (NASDAQ:AAPL) jumped 4.7% in the afternoon session after Loop Capital upgraded its rating on the company's stock to Buy from Hold and reports indicated strong initial sales for the new iPhone 17. 

The investment firm also boosted its price target on the shares to $315 from $226, citing the beginning of a long-awaited iPhone adoption cycle that could extend through 2027. The positive outlook was supported by a report from Counterpoint Research, which found that sales for the iPhone 17 series outpaced the iPhone 16 by 14% in the U.S. and China during the first ten days of availability. The report noted that the base model was a major sales driver in China, while the more expensive iPhone 17 Pro Max saw strong demand in the U.S.

After the initial pop the shares cooled down to $263.07, up 4.3% from previous close.

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What Is The Market Telling Us

Apple’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 28 days ago when the stock gained 4.2% as reports of strong early demand for its new iPhone 17 lineup prompted positive commentary and price target increases from multiple analysts. 

The positive reception for the new phone appeared to spark a new upgrade cycle. Analysts noted that demand was tracking 10% to 15% ahead of the iPhone 16 from the previous year. This strong interest was reflected in shipping lead times, which grew longer than for the prior model, a key sign that demand was outpacing the initial supply. The trend was particularly strong in China. In response to the robust sales signals, several investment banks grew more confident in the stock's outlook. Wedbush, for instance, raised its price target to $310, with one of its analysts stating that Wall Street was "clearly underestimating this iPhone cycle." Bank of America analysts also highlighted the extended shipping dates as a positive indicator for the company's performance.

Apple is up 7.9% since the beginning of the year, and at $263.07 per share, has set a new 52-week high. Investors who bought $1,000 worth of Apple’s shares 5 years ago would now be looking at an investment worth $2,239.

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