Apple stock finally catches a break
Shares of the world's most valuable company are rallying after the iPhone maker announced a release date for its Vision Pro headset.
Apple investors haven’t been celebrating the New Year…until now. Shares of the maker of iEverything rallied Monday after the company announced a release date for its new AR Vision Pro headset. The Vision Pro will be available on February 2 in the United States. Pre-orders begin on January 19.
Shares of Apple rose nearly 2% Monday on the news. If those gains hold, Apple will have its first trading session of 2024 in green. The stock actually fell on the final trading day of 2023 as well, so shares are on a five-day losing streak. Apple’s stock was down nearly 6.5% during that stretch.
That’s hardly a catastrophic drop for Apple, especially given its nearly 50% surge last year. But Apple’s stumble so far this year has allowed rival Microsoft to narrow the market cap gap between the two companies. Mister Softee is now worth about $2.77 trillion, compared to a $2.87 trillion market valuation for Apple.
Some analysts have even been starting to wonder if Apple’s best days are behind it, citing concerns about waning demand for the company’s ubiquitous iPhones. Sales of the newest iteration, the iPhone 15, haven’t been as strong as hoped. And that’s a concern given that more than half of Apple’s revenue comes from the iPhone.
Still, the launch of the Vision Pro could give Apple fans an exciting shiny new thing to focus on. Yes, the first generation Vision Pro will likely be something that mainly the Apple fan boys and girls will buy, the proverbial first adopters. With a price tag of $3,499 with 256GB of storage, this is not a cheap purchase…even for consumers who are getting used to paying more than a pretty penny for iPhones, iPads, Apple Watches and other pricey fare from the Cupertino, Calif. giant.
But given that Apple’s stock still trades at a reasonable, if not exactly dirt cheap, valuation based on its earnings projections, the fact that Vision Pro is now going to finally start to generate some revenue is undeniably a good thing. Apple also still has a ton of cash on its balance sheet, pays a dividend and is buying back stock. That’s all great for iShareholders. Don’t forget too that even if Apple’s iPhone may be maturing, the company is minting money from subscription revenue for iCloud, Apple Music, Apple TV+ and numerous other services. In other words, there don’t seem to be any worms in Apple’s stock.