Apple Inc. shares posted their best week in around half a decade, spearheading a rally in tech shares, says a report from the WSJ. The Cupertino-based firm gained around 11% to $114.92, which is its highest weekly jump since October 2011. During the broad selloff this Tuesday, it was the only stock in the blue-chip index to gain that sent the Dow Industrials down by 1.4%. The blue-chip index hiked 0.2% this week.
Apple stock back on track
The tech shares have been jumping lately and in the past three months, the tech stocks in the S&P 500 have hiked 10%, which is more than twice the gains of any other group. In addition, this is a change from earlier this year as well, when investor got concerned about slowing U.S. growth after a decline in tech.
According to the S&P Dow Jones Indices, if we exclude Apple, it would slash the tech sector’s September gain through Thursday to 0.2% from 1.5%. This week, the iPhone maker added about $63bn in market value even when it declined 0.6% on Friday.
This week, the tech shares rose 3%, in contrast to the 0.5% weekly gain of S&P 500. Also, it is only one of 10 sectors of the index that has gained over the past month. For the week, the tech-heavy Nasdaq Composite Index hiked 2.3%, notes the WSJ.
Raymond James predicts a 20% rally in the Apple Inc. stock due to better than expected sales of the new iPhone 7. The research firm has raised the 12-month price target for Apple from $129 to $139. In a note to clients on Friday, analyst Tavis McCourt wrote, “We have seen substantial anecdotal evidence that iPhone 7/7 Plus preorder demand is up y/y [year over year] throughout the U.S. market, while 7 Plus preorder demand looks strong in multiple geographies based on wait time data from various Apple websites in international markets.”
Strong demand for new iPhone
Instead of offering dramatic new features, Apple’s new smartphone only offered incremental improvements over the previous versions, like water resistance and better battery life, said the reviewers. Also, the removal of the headphone jack from the iPhone 7 and iPhone 7 Plus was polarizing decision.
But, since preorders started last week, the tech giant had already sold out of some versions of the new phone, said Apple Inc. . In the meantime, Samsung’s Galaxy Note 7 is losing the competition because of bad reviews about potential battery fires.
McCourt predicts that the technology behemoth will come back to smartphone sales growth in Q1 of 2017. According to TipRanks, the recommendations of McCourt have returned an average of 12% with a 66% success rate since 2009. This performance makes McCourt a top 200 analyst on all of Wall Street.
On Friday, Apple shares closed down 0.56% at $114.92. Year to date, the stock is up over 7% while in the last one-year, it is up almost 1%.