Apple (AAPL) appear to have overcome concerns about slowing growth and possible antitrust actions. Apple stock hit a buy point on Wednesday after rebounding from a sell-off in the spring.
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In the afternoon of stock exchange trading today, Apple stock was up 0.4%, nearly 136.90. Earlier in the session it climbed to 137.19.
Apple stock hit a buy point of 137.17 on a cup basis, according to IBD MarketSmith charts. However, the trading volume was well below average, a harbinger that positive stock movements lack conviction.
Morgan Stanley analyst Katy Huberty says Apple stock faces several headwinds. They include the slowdown in iPhone sales and fears that the next iPhone 13 handsets will be disappointing.
Antitrust review is an overhang on Apple stocks
Additionally, Apple and other big tech companies are facing antitrust scrutiny in the United States and Europe.
“Apple is increasingly in the eyes of regulators, and while we think their model is defensible, regulatory risk will likely remain excess inventory,” Huberty said in a note to customers last week.
Apple also faces difficult year-to-year comparisons as the economy reopens after the Covid-19 pandemic. The consumer electronics giant saw a surge in sales of Mac computers and iPad tablets last year as the pandemic forced people to work from home and learn from home.
“We recognize these risks but have a more positive outlook,” Huberty said. “In the short term, we think the June quarter will be stronger than expected, as the iPhone and iPad versions are ahead of our model. “
5G wireless adoption is in its early stages
The iPhone 13 won’t look like older S-cycle iPhones, as 5G wireless adoption is still in its infancy, Huberty said.
“As consumers leave their homes to travel and return to the office, we would say that the value of 5G devices increases, providing a compelling catalyst for upgrades even though other technology updates for the next iPhone are more modest,” she declared.
Huberty rates Apple stocks as overweighted, or bought, with a price target of 162.
Apple’s cups base is part of a larger consolidation that began after Apple stock pulled from a record 145.09 on January 25.
Follow Patrick Seitz on Twitter on @IBD_PSeitz for more articles on consumer technology, software, and semiconductor stocks.
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