AAPL Stock : Climbing the Apple Tree May Leave You On Top
The world’s favorite Apple is bouncing up and down a bit lately, but luckily it’s not heading for the food processor. We’re talking about the Apple (NASDAQ:AAPL) company, the legacy of the late Steve Jobs. Despite the recent death of the man who gave us the Macs, iPods, iPads, iPhones, and the other magnificent inventions we can’t live without, the company is steamrolling ahead with innovation, and getting crushed is not part of its future plans. The current volatility of the AAPL stock is defined by its present unpredictability, rising and falling with each given day. So what in the world is going on with it?
Where the Apple Rolls
Throughout the years, the AAPL stock has always seen gains as it introduced new products into the markets, or as it released updated versions of fairly new products. The terms ‘record sales’ and ‘sold out’ often accompanied the release of a new product in its first day or week. Record sales reaching millions of iPhones sold on the first day are no longer a surprise for Apple, its customers, or its shareholders. The future of the AAPL stock was questioned following the death of its CEO, Steve Jobs, on October 5.
The AAPL stock dropped slightly after the death of the visionary was announced, down to around $378 per share. Around October 19, the stock went back up to $422 per share. When this article was written at market close on Friday, the stock stood at $404. Most likely, once this article is published, AAPL will see a different price per share yet again. Last week, AAPL was expected to increase in response to the newly released iPhone 4S. Instead, the company saw a decrease, as its sales rang in lower than expected.
As Daily Finance stated, past iPhone releases do not guarantee success of future product announcements, and this time around, the timing was simply bad. In the past, Apple usually announced new product releases right before the end of a quarter. This always caused a decrease in sales of other Apple products as customers awaited the new iPhone. This time, the iPhone 4S was announced during the first week of the new quarter. Take into consideration the release of the new iPhone, the uncertainty the company faces after the loss of Steve Jobs, the ambivalent plans for the future, and you have a ping-ponging stock, with a lot of momentum. The reason for this change in strategy in terms of product announcement, is unknown at the moment. Look out for future articles from us as we tackle this issue.
Sprouting Expectations or Scrupulous Speculations
As mentioned in our previous article, “The Fate of AAPL- Bleak or Bright”, the future of AAPL seems rather optimistic. Apple’s innovative father may be gone, but the company’s mission, vision, and ideas remain. AAPL’s earnings are expected to increase by 23% next year. Apple can either fall, if its newer ideas lack innovation and quality, or it can rise with new ideas. Analysts remain hopeful for the stock, and the company estimates have not yet been cut. The recent dip in the stock has left the company under speculation. According to Barron’s, Apple is one of the tech companies expected to rise. The financial publication predicts a 25% increase for the stock within the next year, despite its disappointing drop last week.
Flashbacks to the past 20 years of the company’s history show downfalls and rises, as the company fell and got back up again numerous times. Steve Jobs always made the effort to get the company back on its feet, but with him gone, can the company still survive? Its future rests on the shoulders of the new CEO, Tim Cook. As summed up by Forbes, his leadership determines the future of Apple.
The company is not threatened by competitor companies, but its biggest threat stems from its structure – whether Cook will get a grasp on things or not. According to Forbes,
Apple has a large runway for continued growth. Apple has a reputation for being cohesive and everyone working toward a shared vision. The big danger is that without the tight-fisted control of Jobs, Apple may fall into a trap where competing visions and competing agendas make it impossible to produce products with the simplicity and elegance Apple is known for.
Analysts predict that the stock may fall to $100 or rise to $1000 in the near future; however, Siri, the iPhone’s new voice controlled virtual personal assistant, is thought to be the founding innovation Apple needs for its new core, or as put by Forbes, ‘Apple’s Post-Jobs Ticket to $1000’.
Another force surrounding the recent AAPL stock fluctuations over the past year and a half may be hedge funds. The Apple stock is a favorite among hedge fund managers because the funds huge buying power can cause big movements even in this stocks price, creating an ideal environment to execute the dollar cost averaging trading strategy. They sell, sell, sell, sell, sell to drive the price down based on the principles of supply and demand. The natural response to this artificial deflation of stock price is return to normal after the mass selling stops, creating the perfect opportunity to sell at the ‘real’ market value. They sell while the stock is up and hold while the stock is down. Actions like these are thought to provoke the recent declines of AAPL stock prices.
For Now, the Image Remains
Investors and the great minds behind the Apple brand are all wondering, what will happen next? Will the next product make or break Apple? In part, this depends on Cook, and his ability to incorporate and develop new trends. With Steve Jobs as the leader, the Apple company brought on many firsts, ie. the first touch screen phone (iPhone), the first touch screen tablet (iPad), and the first compact light-weight laptop (MacBook Air) to name a few. Apple’s customers and product popularity remain, but whether the image and vision remain, is all up to Cook now. Cook can continue on following the product plan developed by Jobs, but eventually, technology will move forward and new ideas will need to be developed. Jobs may have paved the way for Cook with his turnkey innovation in the computer field, but his ideas will eventually age and the world will call on a Cook instead of looking for Jobs. Overall, there is a future for Apple, at least in the coming years. However, according to USA Today, this may be the end of an era.
The Legend Lives On
“Steve in many ways is still there cause his approach is baked into the Apple culture,” says analyst Van Baker. The torch for Apple could still be carried, and the company could thrive without Jobs.
But can Cook keep up with Steve’s Momentum?
As Gene Munster, an Apple analyst pointed out, afterwards, “it remains to be seen if they can conceive the next big thing after that.”
So What’s In a Name?
Jobs golden touch can be seen everywhere in the company, and maybe even in its stock symbol and name meaning. So why is the stock named AAPL instead of APLE or APL. This could very well be due to Jobs’ innovative thinking and his yearning to be first. Could it be possible that the same thinking was applied to the stock symbol so it could be first on the list of stocks. Hence, the double A. As for the company name, Jobs came up with the name after working at apple orchards in Oregon, and thought the name would be simply, “fun, spirited and not intimidating.”
There is no doubt that Apple will never be the same with Jobs gone. An era ended, an innovator is gone, though a legacy still remains. With its stock’s ups and downs, predictions of the future vary with each day depending on that day’s activities. The two A’s are traveling both ways, but their goal is to fly high, and not tumble down low. Whether this boat can be kept afloat depends on its new captain and on the intensity of the waves that lie in its path.
NOTICE: This article was based on research of stock market information and other sources of information, found both online and in print media. Neither StockTips.com nor any of its owners, contributors, officers, directors, consultants, or employees take responsibility for the accuracy of the information contained in this article or the accuracy of the information on which this article was based. StockTips.com was not compensated by any of the companies mentioned in this article for the preparation of this material, nor were the materials approved by the companies which were mentioned.
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