Tuesday, November 24, 2020

What Next For Apple Inc [AAPL] After a Strong Bull Run Year-to-Date?

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It is an interesting time for Apple Inc [NASDAQ:AAPL] investors. The tech giant has performed very well year-to-date, but the question on every investors mind is, what next? Yesterday, the stock underperformed mainly due to a sluggish performance in the overall market, but also due to the fact that Apple is caught up in Google’s antitrust case.

The DOJ is suing Google for monopoly like practices, and one such practice is an agreement with Apple Inc for an exclusive use of the Google search engine on all Apple products. Reports say that on this front, the two companies have been operating as virtually one company, extracting value from the massive advertising market. Essentially this puts Apple on the radar for antitrust cases alongside the other tech giants. While this could slow down momentum in big tech stocks in the short-term, the long term looks promising. 


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For starters, the U.S is not as strict on antitrust as the EU. As such, there is little chance of a breakup of these companies for monopolistic practices. Besides in the case of the agreement between Google and Apple on search, it was done in the open. Usually, antitrust laws are broken when companies use their dominant positions to cut secret deals that undermine consumers. In essence, it is unlikely that there will be any adverse effects on the price of AAPL in the medium term.

Outside the antitrust uncertainties facing big tech, techwise, Apple is in a good position to grow its market. For starters, the 5G revolution is here and will unlock new revenue streams for Apple. It will offer a new growth cycle for the iPhone and help drive up the stock’s momentum in the long run. The company also recently introduced the iPhone 12 and this is likely to play into its revenues in the near-term, and create upside momentum in the stock short-term.

The stock is also likely to be supported by an increase in value in the equity markets. One trigger to this would be a deal between democrats and republicans on a stimulus package. This is largely expected to inject life into an economy already battered by COVID-19, and by extension give fresh impetus to the economy. If it happens soon, Apple alongside other stocks would gain significantly.

Apple is uniquely positioned for gains because it recently did a stock split that made its stock more affordable to stock investors. On top of that, the company is one of the most stable in the market. Automatically, this makes it one of the stocks that would attract investors in a growth market. 

On top of that, the company is investing in new low cost production countries and lobbying the government to lower taxes for it increase U.S based production. All these point to a company that has what it takes to keep growing in value long term.

About Apple Inc

Apple Inc is one of the world’s largest technology companies. It is based in Cupertino, California. 

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