IBD Stock Analysis
- Stock is breaking out of a cup-with-handle base
- Shares just clearing 192.93 buy point
Industry Group Ranking
Cup with Handle
* Not real-time data. All data shown was captured at
12:59PM EST on
Apple (AAPL) is the IBD Stock of the Day as the consumer electronics giant’s stock is breaking out from a cup-with-handle base following a positive report from a supplier. Apple stock has gained nearly 50% in 2023 and is among the so-called Magnificent Seven companies that have fueled the stock market rally this year.
On the stock market today, Apple stock is up 2.1% at 193.51 in recent trading. Foxconn, a key Apple manufacturing partner, early Tuesday raised its outlook for sales in the December-ending quarter.
With Apple stock’s gains Tuesday, shares broke out of a cup-with-handle base with a buy point of 192.93. Further, Tuesday’s performance pushed Apple past a $3 trillion market capitalization, the world’s highest valuation.
Top Supplier Predicts Growth
The report early Tuesday from Foxconn appeared to offer a boost for Apple stock. Taiwan-based Foxconn is the leading manufacturer of iPhones.
In a monthly revenue update, the contract manufacturer said sales in the first two months of the fourth quarter were slightly better than expected.
“Therefore, the outlook for the fourth quarter should be better than the original guidance for ‘significant growth,'” the company added, according to Reuters. Foxconn did not provide exact figures.
Further, Foxconn said revenue last month reached $20.65 billion, the second highest on record for November and up 18% from last year, according to Reuters.
Apple Stock: Watching Holiday Sales
Previously, Apple stock gained as much as 8% following the firm’s Nov. 2 earnings release. But shares pulled back slightly in recent weeks.
For its fiscal fourth quarter ending Sept. 30, Apple earned $1.46 a share, up 13% year over year, on sales of $89.5 billion, down 1%. Analysts had expected earnings of $1.39 a share on sales of $89.3 billion, according to FactSet.
Apple’s year-over-year earnings growth accelerated for the third straight quarter. But sales fell year over year for a fourth straight quarter.
Analysts are watching for any indicators on iPhone 15 sales during the current quarter. Shares fell last week on a report from UBS that sales were “muted” to start the holiday season.
Concerns about competition for the iPhone is creating a “wall of worry” for investors to get past before embracing the potential of the company’s services business, according to a Goldman Sachs analysis.
Goldman Sachs has a buy rating for Apple and lists AAPL on its “Conviction List” of top stocks. Goldman Sachs analyst Michael Ng expects the number of iPhone users to grow 3% annually through 2027.
“This captive installed base provides AAPL with a unique universe to capture share of wallet at a low customer acquisition cost for services like Apple TV+, Apple Music, and App Store,” Ng wrote in a recent client note.
With its most recent earnings report, Apple projected flat year-over-year sales growth for the current December-ending quarter. However, analysts are on average projecting $118.1 billion in sales, up 1% from the same quarter last year, according to FactSet.
Apple Stock: Technical Ratings
Meanwhile, Apple ranks second among nine stocks in the IBD Telecom Consumer Products group, according to IBD Stock Checkup.
Further, Apple stock has an IBD Composite Rating of 88 out of 99. IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Apple also has an IBD Relative Strength Rating of 84 out of 99. Relative Strength shows how a stock’s price performance stacks up against all other stocks over the last 52 weeks. The best growth stocks typically have RS Ratings of at least 80.
Apple stock is also a recent addition to IBD SwingTrader.
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