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World NewsWhy Apple is the only tech stock that's up today

Why Apple is the only tech stock that’s up today

Apple CEO Tim Cook attends the Allen & Company Sun Valley Conference on July 08, 2021 in Sun Valley, Idaho.

Kevin Dietsch | Getty Images

Apple stock was up greater than 2% on Tuesday as shares tumbled on considerations of the new omicron Covid variant, exhibiting buyers see the firm as a secure haven throughout market uncertainty.

Other giant market cap tech shares like Google, Amazon, Meta (previously Facebook) and Microsoft are down for the day amid a broader market selloff. The Dow Jones Industrial Average dropped greater than 500 factors, the Nasdaq composite was down over 1% and the S&P 500 was down about 1.4% on Tuesday.

Needham analyst Laura Martin advised CNBC that buyers turned to Apple on Tuesday as a result of the firm has prodigious money circulate, permitting it to endure any slowdowns in the financial system and benefit from falling costs.

“There’s a flight to quality with companies that you know will weather the storm, not go bankrupt, not have financial distress,” Martin mentioned, noting that different large-cap tech shares aren’t down as a lot as smaller companies.

Martin added Apple is positioned to introduce new merchandise to energy new progress, together with a headset.

“The biggest criticism of Apple for the last five years is no new products. When you look at the product pipeline, lots of excitement there, especially in the press today about how they’re going to introduce augmented reality glasses at the next WWDC in June,” Martin mentioned.

Martin mentioned there are indications that Apple’s present merchandise, particularly its iPhone Pro fashions, are promoting nicely, probably resulting in an enormous December quarter for the firm. Apple mentioned in October it anticipated file income in its fiscal first quarter, over final yr’s $111.4 billion in gross sales, regardless of provide constraints.

“Lots of really good numbers coming out of retail about how the products are selling. Tablets, especially the high-end iPhones, all of which says they’re going to have high margins and high revenue for the fourth quarter of this year,” Martin mentioned.

Apple makes use of its money circulate not only to spend money on new merchandise however to return capital to shareholders by way of dividends and buybacks, the latter of which can assist maintain the stock value steady. And Bernstein analyst Toni Sacconaghi mentioned in a observe to buyers earlier this month that he expects Apple to proceed repurchasing shares over the subsequent 5 years.

“Our analysis suggests that Apple is likely to be able to continue repurchasing ~ 3-4% of its shares per year until the end of 2026 while growing its dividend per share by 10% annually without taking on net debt on its balance sheet,” Sacconaghi mentioned in a Nov. 17 observe to buyers.

Shares of Apple are up about 25% for the yr.


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