Will Apple Stock Keep Rising? - YouTube

Hello traders! In this video, we’ll take a look  at Apple, the world’s largest company by value,  

and what we can expect for the stock of Apple  in the future. Before we get into the video,  

make sure to like and subscribe, so you can  always be up to date and ready to trade.  

Let’s begin by examining the strengths and  weaknesses of Apple. Apple is one of the  

world’s strongest brands. In fact, it’s the  most valuable brand by market capitalization,  

currently worth $2.648 trillion. Only Microsoft  joins Apple in the trillion-dollar club.  

Apple is capable of introducing  profitable new products,  

thanks to its reputable and admired brand.  From these products, Apple typically generates  

high profit margins with its premium pricing  strategy, even in the event of limited sales.  

Apple’s adoption of intense competitive and growth  strategies involves effective rapid innovation.  

This allows the tech giant to utilize latest  technologies to gain competitive advantage.  

On to the weaknesses, the product and service  pricing of Apple’s offerings is considered high,  

with competitors offering sophisticated products  at less cost. This sways consumers away from  

Apple, but the company has its army of loyal  consumers, so this shouldn’t be too big of an  

issue. Another weakness is Apple’s distribution  network for its goods, which is quite limited.  

This is because of its policy of exclusivity.  It selects authorized resellers, rather than  

allowing any retailer to sell its products.  Lastly, because of its premium pricing strategy,  

Apple has the weakness of sales  dependence on high-end market segments.  

High prices attract customers from  the middle and high-income brackets,  

preventing customers from low-income brackets from  easily purchasing Apple’s consumer electronics.  

This internal strategic factor imposes a  weakness on Apple as high-end segments represent  

only a minority of the global market.  Now, let’s briefly see how Apple performed  

in each quarter this year. In the first quarter,  its earnings per share and revenue figures  

surpassed analyst expectations. The success  can be attributed to booming iPhone 12 sales,  

which were up 17% year-over-year to generate an  impressive $65.6 billion in a single quarter.  

Research firm IDC predicts that Apple shipped more  phones during the first quarter than any other  

smartphone maker has ever done in one quarter. In  the second quarter, Apple beat analyst forecasts  

once again, both in earnings per share and revenue  generated. Its iPhones were the hero once more,  

generating $47.94 billion in the quarter,  which was up 65.5% year-over-year. Notably,  

Apple’s quarter results have also been lifted  by its iPad sales, generating $7.8 billion  

against the $5.58 billion predicted by analysts,  up 79% year-over-year. In the penultimate quarter,  

the company carried on delivering exceptional  results. The company’s EPS was $1.3 against the  

$1.01 expected, which is around 30% more.  Revenue was also greater than expected.  

The reason for the success is not only because  of booming iPhone sales but every one of Apple’s  

major product lines, such as the Mac, Apple  Watch and iPad grew over 12% on an annual basis.  

Now, in the fourth quarter,  things took a darker turn.  

The company fell short of revenue expectations,  despite its total revenue increasing 29% on an  

annual basis. The company rolled out new MacBook  Pros, third generation AirPods and a cheaper  

version of Apple Music which is only controlled  by Siri, the voice assistant of Apple’s products.  

But, that was not enough as CEO Tim Cook claimed  that global supply shortages in silicon and  

COVID-19 related manufacturing issues in Asia,  weighed the company down, disallowing Apple to  

achieve analyst estimations. Now, let’s check out  the fundamentals of Apple. Starting with health,  

the company has a current ratio of 1.07. This  indicates solid financial health and no problems  

in meeting short-term obligations. Regarding  growth, Apple’s earnings per share grows by  

22% on average every year, when looking at the  past five years. Just this year, Apple’s revenue  

grew by 33%, which is quite impressive. Apple  is also one of the most profitable businesses.  

It has a return on assets of 27%, which is better  than 96% of competitors. The industry average is  

3.1%, so we can notice how Apple is superior to  industry peers when looking at profits. Lastly,  

its valuation. Apple has a price to earnings ratio  of 28.72, which only outperforms 27% of industry  

competition. This figure indicates that the Apple  stock is considered expensive at this moment, when  

comparing the stock price to earnings. On to the  technical analysis of Apple. Both short and long  

term trends are positive, as you can see in the  chart. The stock currently trades at $156 dollars,  

with several support zones. One ranges from  $138 to $139, another from $145 to $148 dollars  

between $150 and $152. The stock keeps  rising, and is trading near its 52-week high.  

Looking at the stock performance of the company,  it can be seen that Apple is quite the growth  

stock. The stock began rising slowly in 2010,  almost three decades since its IPO. Recently,  

the stock has been growing consistently. In 5  years, the stock climbed 470%, 254% in the past 3  

years, and 31% since last year. Even recently, the  stock jumped 21% in value since the start of 2021,  

3% of that has been just from the past month.  And now, the facts that matter the most.  

What are the future expectations of Apple? Will  it keep rising? Let’s find out. To begin with,  

Apple aims to innovate a new battery design which  can radically reduce the cost of batteries. This  

will allow Apple to move forward with self-driving  car technology, to produce a passenger vehicle  

which could include its own breakthrough battery  technology, by 2024. This will revolutionize the  

electric car industry should Apple innovate such  product, which will allow it to compete in the  

EV realm, an industry worth over $120 billion, as  well as entering the EV battery world. Ultimately,  

this can accelerate the growth potential of  Apple, which has already been growing for decades.  

In fact, UBS Group expects that the stock price  of Apple can reach to $175 in the short term,  

with JP Morgan forecasting it to reach $180.  This has been Mohammed Zarrouq, chief analyst  

of Gulf First Solution, and I hope you enjoyed  the video. Want to invest in Apple? Visit the  

Gulf Brokers DMCC website at www.gulfbrokers.ae,  where you begin your journey. Happy trading!