Why the AAPL Weekly
Options Trade was Executed?…..
With a share
price up 55% above where it started the year, tech icon Apple Inc. (NASDAQ:AAPL) is easily eclipsing the S&P
500’s gains in 2023. Helping Apple keep the momentum going this week was a
positive note from Morgan Stanley analyst Erik Woodring, who sees great
prospects for Apple in… India.
per capita GDP of less than $2,900 (just 4% of America’s $76,400), you might
not think India would be the best place to try and sell $1,000 iPhones — much
less $3,500 “Vision Pro” virtual reality headsets! But according to Woodring,
India actually is Apple’s “next growth frontier,” and a market in which the
tech giant is gaining market share, selling more (and more expensive models of
its) iPhones, and enjoying an overall positive “ecosystem effect.”
is riding this 'premiumization' wave, reaching record shares in multiple new
markets which are typically not considered its core markets. A prime example is
India, where it grew 50% YoY in Q2 2023," according to Counterpoint
shows the overall cell phone market is experiencing declines as consumers wait
longer to upgrade or buy refurbished devices. However, Apple's premium status
is helping it gain customers who are "opting for a superior experience,
supported by the easy availability of finance options across key geographies."
As if all
that weren’t good enough news, market forecasters believe that earlier this
year, India probably passed China in total population, making it officially the
world’s most populous nation — and the biggest (potential) market for iPhones on
Apple will be growing off of a very small base.
Woodring, Apple will sell only about $6 billion worth of products and services
in India this year — about 1.5% of the company’s global total revenue, and
barely a twelfth the size of the Chinese market. India’s number has been
growing of late, but still amounts to only about 2% of total sales growth over
the last five years, says the analyst. But this number is about to take off.
investments in brand awareness [by Apple in India], local manufacturing, and
affordability programs, combined with India’s economic boom and growing
digitization” all set the stage for India to grow significantly over the next
half decade. Indeed, Woodring sees India alone accounting for as much as 20%
of Apple’s total growth in “installed base” over the next five years, and in 10
years, predicts that one in 10 iPhones worldwide will have a phone number
starting with “+91.”
the company charging more “affordable” prices in the Indian market, 15% of
Apple’s revenue growth over the next five years could come from the
Subcontinent. Farther out, the analyst sees Apple signing up 170 million new
users in India over the next 10 years, and growing its revenues to as much as
$40 billion, a “7x” increase.
favorable demographic tailwinds to support his thesis, Woodring feels confident
predicting today that Apple stock will be worth $220 a share within a year (up
~14% from yesterday’s prices). And he’s “overweighting” the stock, and urging
investors to buy Apple — Morgan Stanley’s new “top pick” in tech.
The AAPL Weekly
Options Trade Explained.....
** OPTION TRADE: Buy AAPL AUG 11 2023 195.000 CALLS - price at last close was $4.28 - adjust accordingly.
Obviously the results will vary from trader to trader
depending on entry cost and exit price that was undertaken.
Entered the AAPL Weekly Options (CALL) Trade on Wednesday, July 19,
2023, for $3.90.
Sold the AAPL Weekly Options contracts on Wednesday, July 19,
2023, for $7.19; a potential profit of 84%.
By Friday, the share price had pulled back and is now
setting up for another upward run if the market movement becomes favourable.
Don’t miss out on further trades – become a
Further Catalysts for the AAPL Weekly Options Trade…..
slated to report fiscal third-quarter results on August 3 and investment firm
Jefferies said the U.S. tech giant is likely to remain a "source of
safety" for investors due to its predictability.
Andrew Uerkwitz, who has a buy rating on Apple, said "it’s moat has been,
remains, and will be its ability to integrate software services with its
hardware that builds a regular replacement cycle, ability to slowly raise
prices, and take share," Uerkwitz wrote in an investor note. "This
consistency is what makes it a buy-rated stock—especially in an uncertain
coming June quarter, Uerkwitz, who raised raised his per-share price target to
$225 from $210, expects Apple to generate $83.6B in revenue, above the Wall
Street consensus, due in part to the iPhone and services, which he said are the
" two most important drivers of the stock."
have been on artificial intelligence (AI) this year, with the market projected to
expand at a compound annual growth rate of 37% through 2030.
of its peers, Apple seems strategically intent on avoiding the term AI. While
other companies are heavily using the phrase to garner investor support, the
iPhone company is instead focused on debuting new software features that are
quietly enabled by AI. In doing so, Apple is protecting its brand by making it
harder to lump its business in with the other big names in AI and avoid
comparisons. This strategy can reduce volatility in Apple's stock, as it won't
be harshly affected by fluctuations in the AI market.
dominance of its products means it will likely be the main driver of AI
adoption by the public. At Apple's Worldwide Developer Conference in June, it
unveiled several new AI-run software features. Improvements to the iPhone's
autocorrect use a transformer language model, the same technology that led to
OpenAI's ChatGPT. However, while other companies utilize massive server farms
to run similar AI workloads, Apple impressively gets the job done directly on
to its smartphone, the company has brought AI upgrades to the AirPod Pros,
which can automatically turn off noise canceling when the user is in a
conversation. As Apple continues to develop alongside AI, other products in its
lineup will likely get upgrades, which could bolster consumer interest and
revenue over the long term.
Precision Industry Co Ltd (OTC: HNHPF) Foxconn Technology Group has bought $33
million of equipment from an Apple unit for its operations in India since 2022.
subsidiary of the Taiwanese company acquired equipment from Apple Operations
Ltd for operational needs
leading customer Apple sometimes helps finance the cost of equipment that the
Taiwanese company uses to make the majority of the iPhones.
India's Minister of State for Technology said that Apple looks to ramp up
electronics production in the country, a month after CEO Tim Cook renewed a
pledge to invest in the region.
tripled iPhone production and assembled over $7 billion of iPhones in India
last fiscal year, making almost 7% of its handsets in the country. Meanwhile,
Foxconn plans to invest about $700 million to build a new plant in the southern
Indian state of Karnataka, partly to ramp up local production of iPhone parts.
Foxconn's investment is likely to create 25,000 jobs in the first phase.
Apple occupies an outsized position within
Berkshire's portfolio, taking up 46% of its total value as of March 31, 2023.
The technology company is responsible for revolutionizing the smartphone
industry with the invention of its iconic iPhone back in 2007.
revenue for the company rose steadily through the pandemic from $274.5 billion
to $394.3 billion from fiscal 2020 (ending Sept. 30th) to fiscal 2022. Over the
same period, net income jumped from $57.4 billion to $99.8 billion.
flow improved from $73.4 billion to $111.4 billion from the 2020 to 2022 fiscal
year for an average of $92.6 billion in free cash flow generated. In tandem
with rising free cash flow, Apple's annual dividend per share has also risen
from $0.795 to $0.90.
behemoth just released its latest new product Vision Pro, a mixed-reality
headset that's easy to use and promises to revolutionize the
wearable-technology sector. Apple has plans to sell it in 2024 at a retail
price of $3,499. This will be the company's next big product and may bring in
even higher revenue to support its dividend payouts.
According to the issued ratings of 33 analysts in the last
year, the consensus rating for Apple stock is Moderate Buy based on the current
2 sell ratings, 7 hold ratings and 24 buy ratings for AAPL. The average
twelve-month price prediction for Apple is $182.54 with a high price target of
$240.00 and a low price target of $54.00.
Apple has made a lot of headlines
this year after unveiling its highly anticipated virtual/augmented reality
(VR/AR) headset and becoming the first company to achieve a market cap of $3
Shares of Apple stock opened at
$193.73 on Wednesday. The company has a fifty day simple moving average of
$182.64 and a 200-day simple moving average of $163.30. The company has a
current ratio of 0.94, a quick ratio of 0.88 and a debt-to-equity ratio of 1.56.
Apple Inc. has a 12-month low of $124.17 and a 12-month high of $194.48. The
stock has a market cap of $3.05 trillion, a price-to-earnings ratio of 32.89, and
a PEG ratio of 2.54 and a beta of 1.28.