Is Apple’s soaring shares just a fad? According to experts, Apple (AAPL) stock might be traded “above fair value”.
Within a year, Apple’s stock value went up from $224 to $366. For only the past week, Apple went up 1.87% however investors are warning this might be a bad omen for the second semester of 2020, especially in the tech industry.
On Friday 26th, the New York Times’ announced it would stop its partnership with Apple News, making it the highest profile media to leave the platform. Since then, several media have discussed breaking off their partnership owing to the COVID-19 crisis that has increased online readership across publications.
Apple, a ‘survival’ ally during the pandemic
Who hasn’t relied on an Apple product during the pandemic? From personal usage of an iPhone to a professional usage of a Macbook, Apple’s technology has been at the heart of the stay-at-home order since mid-March.
The company’s official results state a “revenue of $58.3 billion, an increase of 1 percent from the year-ago quarter, and quarterly earnings per diluted share of $2.55, up 4 percent. International sales accounted for 62 percent of the quarter’s revenue.”
Apple’s stock is up 11.6% since the beginning of the year, reports Wedgewood Partners, an investment management firm.
On Monday, 29th June, “Apple was also among the biggest contributors of gains on the Dow, climbing 2.30%”, confirmed CNBC.
Is the share overvalued?
However some analysts specialized in Big Tech are dubious about Apple’s near future. As a matter of fact, some of them think the share might plummet.
“Looking backward, it’s been sky-high. Simply by the ‘law of large numbers,” it’s very unlikely Apple can maintain a comparable go-forward growth rate,” analyzes Ray Merola.
Overvalued? Apple’s 19.2% Growth Gaphttps://t.co/U3QfiWtIyt
— Malvin Spooner (@mvrkinvestor) June 23, 2020
Moreover, the stock market expert concludes that the market is overvaluing Apple, while its share is one of the most expensive on Nasdaq.
He predicts a 2021 trading price at $355, against $365 now.
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The NYT might cause a disruption
Last but not least, Monday 29th, June was also a dark day for Apple shareholders since the highest profile newspaper in the world, the New York Times, announced it would stop its collaboration with Apple News.
Although Apple reported to have a 6% increase on its share the same day, the American daily newspaper’s declaration might hinder Apple’s reputation and financial stability in the long run.
The Times added 587,000 new digital subscribers – a “quarterly record” reports Nasdaq’s news website, which enticed the outlet to reveal that Apple takes a 30% cut on each subscription made via its platform, Apple News.
According to a NYT spokesman, “it does not align with our strategy to fund quality journalism by building direct relationships with paying readers”.
The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.