Apple Inc. ’s plan to expand Apple Pay is likely to open up a whole new market for the tech giant. But Jim Cramer thinks the stock is stuck in a range because Wall Street doesn’t seem to care much about these recent forays.
“Apple is doing a lot of things that people don’t seem to care about right now,” he said on CNBC.
Apple Pay Expansion Fails to Excite Wall Street
Apple Inc. is reportedly working on rolling out a mobile person-to-person payment service. The Wall Street Journal revealed on Wednesday that Apple is in talks with several U.S. banks to develop a system similar to PayPal’s Venmo. Consumers would be able to “zap” payments from their checking accounts to recipients via their Apple devices. Shares of PayPal fell Thursday following the news.
The service is expected to be launched as early as next year, and would likely increase the scope of iPhone ‘Wallet.’ But Wall Street barely took notice, and the stock has been stuck in a narrow trading range of $115-$117 for the past couple of days.
“This is something that’s a good idea for Apple. But it can’t get out of its own way right now,” Cramer added.
Apple Inc. has big payment ambitions. Earlier this week, CEO Tim Cook said the next generation “will not know what money is.” It unveiled its mobile payments service in October last year, allowing users to pay for goods using money from their bank account.
Apple Inc. iPhone scare
Another reason for the apparent lack of activity in Apple’s stock could be the forecast from some analysts that iPhone sales may have peaked.
A recent Credit Suisse report says that Apple has slashed up to 10% of its component orders due to falling demand for the iPhone 6S. The analysts there now expect Apple Inc. to ship about 222 million iPhones during the next calendar year. That’s down from their earlier estimate of 242 million.
In a note to clients on Tuesday, Credit Suisse analyst Kulbinder Garcha wrote, “Apple has lowered its component orders by as much as 10% according to our teams in Asia. The continued weak supply chain news could weigh on Apple shares for the next few weeks and quarters.”
Jim Cramer says such bearish reports about Apple have emerged many times in the past, and most of them turn out to be wrong.
“Judging Apple based on these channel checks from its suppliers tends to be a mistake,” Cramer noted.
No wonder, he thinks it’s better to hold on to the stock than trade it.
Shares of Apple Inc. closed Thursday at $115.72. The stock is barely up 3% in the past one month.