As one of the largest and most widely operated companies in the world, Apple. (NASDAQ: AAPL) usually has a huge impact on the market. This is especially true in 2020, as high-tech companies have taken over market leadership and pushed up the entire market based on the time of day.
However, recently, technology stocks have acted somewhat dull and lost their leadership in some “cyclical” industries, such as the financial and industrial industries, because many investors hope for economic recovery. In addition, we call it the “Pandemic Name” Working day company (Nasdaq: WDAY), Docusign Inc (NASDAQ: DOCU), and Trading Taiwan Company (Nasdaq: TTD) has shifted attention from “large stocks.”
Apple has never lacked attention when releasing reports, even if its earnings compete with the other three “FAANG” stocks. This was the case when APL opened its fourth-quarter earnings report on Thursday after the market closed, but because CEO Tim Cook’s company is still waving a $2 trillion market value, AAPL said Or anything you do can stand out in a crowded calendar.
Questions about iPhone 12 launch, Mac, iPad sales
The big question coming is how the new iPhone 12 will perform after its release a few weeks ago. Operators offer special offers to attract customers to use their higher-speed products, so the switch to 5G may eventually become a rider for iPhone 12.
However, as other companies take advantage of 5G, domestic and foreign competition is likely to be the case. So how does AAPL view this competition? And how many iPhone users will go to the Apple Store of their choice (or online) to replace their phones with a 5G model? Analysts said the early signs look good, but AAPL may reveal more signs on Thursday.
In addition to more clues about iPhone sales, investors should also pay attention to the demand for iPad and Mac. Due to the increase in work at home, entertainment, and study caused by the pandemic, these products were no longer in the spotlight a few years ago, and they will come back to life in 2020. Sometimes, these clues can be discovered in advance by checking the performance of the company that manufactures “peripheral equipment” for AAPL products.
For example, Barron pointed out, please consider a copy from Logitech International (NASDAQ: LOGI), the company said that iPad accessories increased by 144% during the quarter. This makes some analysts optimistic about the APL report date.
AAPL used to be primarily a product company, but today’s services are also significant. The service business covers everything from the App Store to licensing transactions, and service revenue is only slightly lower than analysts’ expectations in the third quarter. Analysts may be too optimistic, because services have indeed increased by nearly 15% year-on-year, which is not a chill considering the epidemic.
Last time, the dollar value sales of the company’s ceiling products began to increase. iPhone sales increased by more than 1.6% year-on-year, while Mac sales jumped more than 21%, and iPad sales increased by more than 31%. The average forecast of Refinitiv analysts is a drop of about 2%, which helped Apple report an 11% revenue growth.
However, AAPL did not share guidance last quarter. Will you decide to do this this time? If this is done, this may work well on Wall Street, where it is eager to gain more corporate insight into 2021 and beyond.
Cooled thermal inventory
Apple’s strong performance in the third quarter of its fiscal year has helped stocks that have made up for the losses they lost in the coronavirus-induced sell-off earlier this year. The stock was also boosted after the company announced that it would conduct a four-share swap at the end of July. After the split began, the company’s stock hit a record high at the beginning of last month, but the stock price has been falling since then.
Retail investors often use stock splits as trading opportunities, using popular names that may become too expensive due to the price per share. But sometimes buying interest will cool down after the split.
In addition, there are AAPL (the behemoth of consumer electronics) and AAPL (component of the technical field). In this regard, AAPL became part of the larger story of the technology wave, followed by departmental rotation and profit-taking.
Last month, technology-related stocks saw a broader retracement, which led to a decline in APL and other industry stocks (see Figure 1). As technology-related names became popular and after leading the market higher, as investors seemed to decide to take some money from the watch, Gale was eliminated.
Figure 1: Technology wave and partial retracement.Share of apple (AAPL-Candlestick) has been in operation since the depth of the coronavirus evacuation in March 2020. technology Department is general (IXT-purple line). Due to profit-taking and industry rotation, both have fallen in recent days. Data source: Nasdaq, S&P Dow Jones Indices. Chart source: TD Ameritrade’s thinkorswim® platform. For illustration purposes only. Past performance does not guarantee future results.
Baby and bath water?
As investors flocked to big names hoping to join the sharp rebound, high-tech became a crowded deal earlier this year. Those looking for giant stocks may have triggered this rebound because they both want to buy shares and the sense of security of large established players who want to benefit from the pandemic.
There is also the concept of “cash is king”, which is where AAPL often beats most of its peers. According to company filings, as of the second quarter, AAPL had nearly $200 billion in cash and marketable securities on its balance sheet. In this way, it can deal with potential storms (such as a deep recession) and may make one or two strategic acquisitions.
As we enter the earnings report later this week, the recent pullback has brought Apple’s stock price well below its record. Although this may seem like a cheap trading opportunity for some people, the stock is still rising strongly this year, and its valuation is much higher than historically normal levels, which may attract people’s attention.
In technical leadership, antitrust concerns
As the coronavirus concerns continue, the trend of technology-related companies leading the entire market up or down will not necessarily disappear.
But there are other factors that also affect the technological world, such as antitrust turbulence. However, Apple may not be as susceptible as other companies because of fierce competition between iPhone manufacturers and other device and computer manufacturers.
From an antitrust perspective, this competition may be a boon, but Samsung, Alphabet company (NASDAQ: GOOGL), and Microsoft Corporation (NASDAQ: MSFT) is still a force that cannot be ignored by Apple, and investors must consider it in the calculation.
Apple earnings and option activity
According to estimates by third-party consensus analysts, AAPL expects adjusted earnings to be US$0.71, down from US$0.76 in the same period last year. Revenue is expected to be US$64.1 billion, which is basically the same as a year ago.
According to the Market Maker Move™ indicator on the thinkorswim® platform, the options market has expected the stock price to fluctuate 3.4% in either direction before and after the earnings release.
Looking forward to expiration on October 30, put options trading has been very active, concentrated in 110 and 112 exercises. Looking upwards, the numbers are even higher. There are 120 calls to make others stand out, but they are also very concentrated at the 115 and 125 execution prices. As of Wednesday morning, the implied volatility was at the 43rd percentile.
Note: Call options represent the right to purchase the underlying security at a predetermined price within a specified time, not an obligation. Put options represent the right to sell the underlying securities at a predetermined price within a set time, not the obligation.
TD Ameritrade® Comments are for educational purposes only. SIPC member. Options involve risks and are not suitable for all investors.please read Features and risks of standardized options.
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