Apple Inc. (NASDAQ:AAPL)’s stock closed on an all-time high yesterday, breaking the $100 dollar per share barrier for the first time since the stock split in June. This surge in the stock has happened weeks before the launch of iPhone 6. Bloomberg’s Michael Regan and Adam Satariano talked about the Apple’s valuation and the impact that iPhone 6 and iWatch might have on the stock.
Regan said that the Apple Inc. (NASDAQ:AAPL)’s stock has went up by 25% in 2014, which justified the valuation of the company. He also mentioned a note from Morgan Stanley’s Katy Huberty, which said that 60 million Apple’s iWatches might be sold in the first year. With a price tag of $300 per device, this might account for $18 billion in sales.
Apple Inc. (NASDAQ:AAPL) has made huge investments, which ultimately yields them a lot of profits. Investor Carl Icahn thinks that the Apple’s cycle period for investing and reaping benefits from new products is 2 years. Apple’s stock has hit the all-time high in September 2012, two days before the iPhone 5 launch. Now, weeks before the launch of iPhone 6, they have hit another all-time high. By no means, this can be considered as a coincidence.
Satariano thinks that anticipation surrounding the new launches pushed the investors to hold onto Apple’s stock.
“[…] There is a lot of buzz around the new product, but really as the iPhone goes, so goes Apple. […] So, analysts, including Katy Huberty and others, are really anticipating that these devices are going to be a huge hit and so investors are kind of buying on the rumor and will see if they hold on or they sell on the news, when these things eventually come out,” Satariano added.
Regan said that Apple Inc. (NASDAQ:AAPL) is doing a lot of things to boost their earning per share, like, stock buybacks and dividend payback. He thinks that investors are more interested in earnings per share, in spite of the revenues being flat.
Satariano said that there are two categories of tech stocks. Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB) come in the first category, which are doing really well. The other category includes companies like Microsoft Corporation (NASDAQ:MSFT), which are still trying to get their foothold back in the market.
He pointed out that the iPhone 6 and the iWatch will be the first product launch under the leadership of Apple Inc. (NASDAQ:AAPL)’s new CEO, Tim Cook.