By Nigam Arora
AAPL is long from $4.68. It is trading at $333.19. This represents a gain of 7019% for the long-time members of The Arora Report.
Sentiment May Win Over Fundamentals
The AAPL target is being raised because sentiment may drive AAPL stock rather than the fundamentals. This periodically happens to certain stocks and can last a long time. AAPL could be at an inflection point where sentiment becomes the main driver of the stock ignoring fundamentals.
Sentiment
Sentiment is becoming increasingly positive for the following reasons:
- As money flows out of semiconductors and other hyperscalers, it is flowing into AAPL.
- The market perceives AAPL as a defensive stock. Any time there is turmoil in the market, AAPL gets a bid.
- There is a distinct possibility that AAPL’s weakness will become its strength. AAPL’s weakness is that it has fallen way behind in AI. However, because AAPL has not invested enough in AI, it spends only 2.5% of its revenue on capital expenditures (capex). As a reference, on average hyperscalers are spending 39% of their revenue on capex. The stock market is beginning to see AAPL not spending on AI as an advantage.
Fundamentals
Investors need to remember that a big part of moves in stocks is driven by sentiment rather than fundamentals. From a fundamental point of view, AAPL’s story is negative:
- The market for the iPhone is saturated.
- AAPL is heavily dependent on upgrade cycles.
- AAPL’s services business is growing, but it is growing slowly.
- AAPL has lagged behind in AI.
Zones
For those following the Good Way, the Buy Now rating is *** (To see the locked content, please take a 30 day free trial).
For those following the Best Way, the buy zone is $*** – $***.
The very long-term target zone is $568 – $586.
Trade Around Position
The probability of our system giving a signal for a trade around position in AAPL is increasing. A core position is separate and distinct from a trade around position. A trade around position is a technique that billionaires and hedge funds use to dramatically increase returns and reduce risks. Please see Trade Management Guidelines to learn about trade around positions.
What To Do Now
Click here to start a 30 day free trial and see what to do now.
This post was published on Friday, July 17th, in ZYX Buy Change Alert.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
