Stocks are on track to hit new highs on Tuesday, but stocks are not immune to problems that could trigger a sell-off.
(ticker: AAPL) was up 1.6% Tuesday afternoon, trading at $188.30 per share. If the stock closes at those levels,
the company’s stock price will hit a new high—and mark the company’s fifth new record in 2023, according to Dow Jones Market Data.
Apple stock has skyrocketed, up 45% year-to-date. Tech stocks as a whole have had a solid six months; Investor excitement around artificial intelligence has helped
30% increase by 2023.
But AI is not the only factor help Apple. Strong reporting company income in May and investors are excited about the newly announced 15-inch screen by Apple. Macbook Air and Vision Pro notebooks earphone can make sales down the line. Investors are also preparing for Apple iPhone 15It is expected to launch around September 2023.
However, Apple stock, which currently trades at 28.8 times forward earnings, could still be hit hard by the economic downturn in the US.
Most of Apple’s revenue comes from product sales: $51.3 billion—or 54% of the company’s second-quarter revenue—come from the iPhone. Consumers experiencing an economic downturn may be less likely to buy Apple products or pay for services through the App Store or Apple Music, affecting the company’s revenue.
UBS . analyst David Vogt downgrade Apple switched to Neutral from Buy with a price target of $190 on June 12, citing a possible slowdown in iPhone sales and service revenue.
Calculation difficulty, macro headwinds, and slowing growth in the iPhone install base will result in a significant deceleration in Services revenue growth in 2023 and 24, he wrote.
Vogt is not the only analyst to point to the risks.
“Apple has continued to expand its product portfolio and work on a host of new innovations,” Monness Crespi Hardt analyst Brian White, who rates the stock as Buy with a $188 price target, wrote in a research note earlier this month. “That said, we believe the short-term macroeconomic environment and geopolitical backdrop pose challenges.”
Write to Angela Palumbo at [email protected]