Apple’s market value skyrockets as tech rally and low inflation lift stocks
On Wednesday, Apple Inc. stock hit an all-time high as tech shares surged on expectations that the Fed will lower interest rates soon due to easing inflation.
The iPhone maker’s stock rose 1.7% to US$197.96, breaking its previous closing high established in July. The rise brings the stock’s year-to-date gain to 52%, for a market valuation of over US$3.08 trillion, solidifying Apple’s status as the world’s most valuable business.
Apple and other technology companies have gained in recent months as US Treasury rates have fallen amid evidence that inflation is moderating and the economy remains robust. This viewpoint was confirmed on Wednesday when central bankers maintained interest rates unchanged for the third time in a row and forecasted a series of rate decreases next year. During the day, the 10-year Treasury plummeted to its lowest level since August and is on the verge of falling below 4%.
Apple’s latest climb is a significant reversal from October when the stock closed at its lowest level in almost five months due to concerns about revenue growth and sales in China.
Apple’s revenue has fallen in every quarter of fiscal 2023 compared to the same time the previous year. It forecasted last month that Christmas quarter revenues would be around the same as last year, surprising some investors.
According to Bloomberg’s average of analyst projections, the company’s revenue growth would re-accelerate in 2024 as demand for smartphones, laptops, and PCs recovers.
The rise in Apple’s shares comes amid a larger tech rally in which prominent firms in the industry are seeing significant increases.
According to the Business Times, the rise extends beyond Apple and includes other major technology equities. This increasing trend is a reflection of improved investor confidence in the technology industry.
Confidence of Investor in Apple’s Future
Investors remain unshakable in their belief in Apple’s future potential. With a rich product selection, including the highly anticipated iPhone models, and a thriving network of services, Apple is primed for additional expansion.
Investors are encouraged by the company’s dedication to sustainability and strong brand loyalty.
Apple’s unprecedented success has far-reaching repercussions for the technology industry. The recent rebound in major technology equities, notably Apple, indicates increased investor confidence in the industry’s potential for growth and innovation.
As Apple leads the charge, other IT titans’ stock values are also rising, cementing the sector’s dominance in the global market.
Apple is the world’s most valuable company by market cap, with a valuation of US$2.34 trillion as of November 2022. Apple saw its market value soar to a record US$190.9 billion in a single day on November 11, 2022, thanks to a market rally that boosted its share price by 9% on apple-quarterly-earnings-covid-sales. The market rally was fueled by data that showed US inflation cooled in October, easing fears of faster interest rate hikes by the Federal Reserve.
Apple’s sales and profits have been strong amid the pandemic, as locked-down consumers bought more iPhones, iPads, Macs, and other devices. Apple’s sales in China doubled year-on-year in the first quarter of 2021, driven by the popularity of the iPhone 12, which supports 5G networks. Apple also benefits from its loyal customer base, its brand power, and its ecosystem of products and services, which create recurring revenue streams.
Apple faces some challenges, such as the global chip shortage, regulatory scrutiny, competition from rivals, and innovation pressure. Apple continues to invest in new products, features, and technologies, such as the Apple Watch, AirPods, Apple TV, Apple Car, augmented reality, and artificial intelligence.