By
Godfrey Benjamin
April 23rd, 2024
Apple (AAPL) stock has managed to jump over $375 during the trading session yesterday. This happened as the technology giant increased its manufacturing and delivery capacity for the last half of 2020 and the beginning of 2021.
Apple Inc (NASDAQ: AAPL) stock price has fallen in the pre-market after setting a new record high. Yesterday, Apple stock managed to hit a record of $375.78. It closed at $373.85 (+2.68%). In the pre-market, at the time of writing, the stock is trading at $373.05 (-0.21%).
The company has strived to increase its manufacturing capacity for the last half of the year into the first half of 2021.
Sources say that Loop Capital (the investment firm) analysts had indicated this in a research note. Ananda Baruah and Shawn Harrison said in the note that Apple had increased its capacity for the first quarter of 2021 to 10 million units. This is a 100% increase from the initial 5 million units.
The note reads:
“While the increase for March 2021 is sizable, we suspect Apple would rather be prepared for a net increase in demand rather than be caught short given a lack of visibility and the uncertainty in supply associated with the shift to 5G components.”
Apple Hits a Record Boosted by Increased iPhone Manufacturing Plans
Apple plans to introduce 5G capability in its next generation of iPhones.
Speaking about 5G, the issue has been a thorny one. The U.S. government has played hardball on all fronts to give its technology competitors an advantage. How this plays out remains yet to be seen.
Loop Capital has forecasted that Apple will deliver 45 million iPhones in the third quarter of the year. It represents a 7% increase despite the COVID-19 pandemic. In the last quarter, Apple is expected to ship 70 million units of phones. It is a 4% drop from the previous years’ numbers. Loop Capital has also predicted that the technology giant will ship 39 million phones in the first quarter of 2021. It represents a zero change for the same period.
From the looks of it, Apple (AAPL) stock price is on the verge of a sudden series of price movements to record highs. Several indicators point to this. Apple has been able to keep its business running despite the current pandemic. It shows that the management knows how to steer the company during rough times.
Apple Is in Great Shape
If you take a look at Apple’s numbers, you will see that the company has everything going for it.
Apple has commenced the repurchasing of $50 billion of stock. The process began at the end of April. The mere fact that a company can do this during a time when things are rough shows strength.
Apple at the end of the last quarter had a net surplus of cash. The technology giant had a cash position of $193 billion against a debt of $110 billion. It shows that investors have 83 billion reasons to trust Tim Cook and his team of wizards.
The fact that the stock repurchases are debt-fueled despite such a strong cash position is another plus. Fuelling such activities by debt in Apple’s neck of the woods is cheaper than repatriating cash stashed overseas. A company investing in itself if its position is healthy is not a bad idea.
After all, Apple could become a $2 trillion company soon.