Shares of techno giant Apple Inc. jumped to another record high on Wednesday, and have doubled over the past year. The company’s report on its app store sales said that App Store sales reached $1.42 billion between Christmas Eve and New Year Eve.
This represents a 16% increase from the same holiday-season period a year ago. Just on New Year’s Day, App Store customers spent a record of $386 million in just one day. That is 20% more than the case was last year.
The App Store started with its work back in 2008, and since then, the company claims app developers have grossed more than $155 billion. Only one-quarter of those earnings, approximately $39 billion, was recorded in 2019.
Wedbush analyst Dan Ives called the numbers “impressive.” Let’s also not forget that Apple took 2019 by the hand, by selling 67 million AirPods. That is more than originally expected 56 million.
At the time of writing the stock was still rising in premarket to a new record of $303.19. It has now run up around 102% over the past 12 months.
Apple FANG’s Best Performer
There are only two other shares on the S&P 500 index that have doubled in the past year: Advanced Micro Devices Inc.’s (AMD) stock that went up by 130.5% and Lam Research Corp. shares that rose by 119.1%. However, both of those computer chip companies are much smaller than Apple which is, by all means, the most valuable U.S. company with a market capitalization of $1.329 trillion. Just for comparison, AMD’s market cap is $53.3 billion and Lam’s market cap is $43.5 billion.
To elaborate more, the Nasdaq Composite Index has, over the last year, rose by 32.4% while the S&P 500 increased 26.4%.
When talking about the FANG group, Apple has also has been the best performer by wide margins in the past year.
On January 8 last year, Apple’s stock closed at $150.75 with more than 4.715 billion shares outstanding, Since then, Apple’s market cap has advanced by approximately $618 billion, which makes it the fifth most valuable U.S. company.
The stock’s race came after the company said it could start to focus more on its services business, which includes its App Store. That also includes stepping further away from its iPhone business as the main niche. In 2019, Apple introduced Apple Arcade, Apple TV+, Apple News+ and Apple Card, to go with other offerings, such as Apple Music and iCloud.
$400 per Share – Possible or Not?
Wedbush’s Ives confirmed his outperform rating and his stock price target of $350. He said his “bull case valuation scenario” is at $400 a share, which implies a 32% rise from where it stands now.
He wrote in his letter to investors:
“We continue to believe an upside on iPhone units, services, and AirPods will result in a strong December quarter for [Apple], on January 28th after the bell with clear momentum heading into a massive 5G super cycle with currently 350 million iPhone customers in the window of an upgrade opportunity.”
Instinet’s Jeffrey Kvaal wasn’t that optimistic but still, he called the growth “healthy, if slowing.” He said the data means App developer earnings growth has slowed down to 15% in 2019 from 27% in 2018. He expected the growth to hover more around 20% growth.
Kvaal stated the update shows small upside to his growth predictions when it comes to Apple’s services business. Kvaal confirmed the neutral rating he’s had on Apple since December 2017 and kept his stock price target at $225, which is 26% below current levels.
“Our estimate of 15% App Store growth in 2019 is likely a conservative barometer for FY20 growth, as it reflects a slow year in China gaming as well as only trial subscriptions for Apple TV+. Nevertheless, the growth rates imply little scope for upside to our 18% estimate and may suggest deceleration towards the mid or even low teens in FY21,” wrote he in his research note.
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