Apple (NASDAQ: AAPL) stock price rallied more than 41% since the start of this year. Before the rally, the stock price had lost close to 40% of value during the final quarter of last year. It shares are only up 2% compared to the year-ago period.
The stock price is currently trading around $220, down slightly from an all-time high of $233 a share that it had hit during the final quarter of last year.
The upside momentum is supported by improving sentiments for iPhone products and services revenue. This is evident from the strong demand for iPhone 11.
Digitimes sources said, “Pre-orders for iPhone 11 are strong in Taiwan thanks to the device pricing and local promotional campaigns. Demand for the iPhone 11 Pro 256GB and iPhone Pro Max accounted for 70% of pre-orders with the remainder going to the iPhone 11.”
On the other hand, Apple’s strategy of diversifying its revenue base is working. The company generated record services revenue of $11.5 billion in the latest quarter. In addition, its wearables, home, and accessories revenue stood at $5.5B, higher from the consensus estimate for $4.82 billion.
“This was our biggest June quarter ever. The revenue growth is driven by all-time record revenue from Services, accelerating growth from wearables and strong performance from iPad and Mac. The significant improvement in iPhone trends adding to revenue growth,” said Tim Cook, Apple’s CEO.
Its cash generation potential remains strong enough to cover cash returns and investments in growth opportunities. It generated $11.6 billion in operating cash flow compared to dividend payments of $3.6 billion.
Moreover, Apple’s strategy of reducing outstanding shares has also been offering support to share price, dividends, and earnings per share. The company has repurchased 88 million shares in the latest quarter.
It expects fourth-quarter revenue to stand in the range of $64 billion. Overall, the prospects for revenue diversification along with expectations from iPhone 11 are likely to add to Apple stock price upside momentum. Therefore, the stock is well set to hit a new all-time high.
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