Shares of AAPL surge as hype builds for Friday's iPhone 7, Apple Watch Series 2 launches

Posted:
in AAPL Investors edited September 2016
Shares of Apple have climbed significantly this week, as investors buy into consumer excitement ahead of the iPhone 7 debut this Friday, hoping the next-generation model will set new records.




At one point Wednesday afternoon, shares of AAPL were up more than 4 percent for the day's trading. The company's stock was consistently over $110 throughout the day, marking the third straight day of gains this week.

Apple is trading at its highest levels in about nine months, just days before the iPhone 7, iPhone 7 Plus and Apple Watch Series 2 are set to go on sale.

Expectations on Wall Street for the iPhone 7 were somewhat subdued prior to last week's announcement, due to leaks revealing that the handset will have largely the same external design as its two predecessors, the iPhone 6s and iPhone 6.

However, a few key reports have come out this week suggesting that preorder demand for the iPhone 7 series has been particularly strong. Of note, T-Mobile CEO John Legere said on Monday that preorders for the iPhone 7 at his carrier are four times greater than the iPhone 6 launch, while suppliers in the Far East have reportedly indicated that chip orders for the iPhone 7 have come in higher than expected.

This week's gains make it clear that most investors are not bothered by the fact that Apple will not announce launch sales this year, breaking from tradition. The company told investors last week that because demand for new iPhones well outstrips supply, opening weekend sales reflect only how many iPhones Apple was able to manufacture, rather than how many consumers wanted to purchase.




Analyst Amit Daryanani of RBC Capital Markets also weighed in on Wednesday, in a note to investors that was provided to AppleInsider. He sees a few key factors pushing shares of AAPL higher, including the recent Galaxy Note 7 recall due to exploding batteries.

"Samsung woes with the Galaxy Note 7 could enable AAPL to actually accelerate their share gains, a dynamic we think would have occurred in the absence of Samsung issues, but perhaps at a lower magnitude vs. the current scenario," Daryanani said.

He also believes the average selling price of the iPhone should climb, as more users gravitate toward the dual-camera design of the larger iPhone 7 Plus. In addition, this year the Plus model has a $120 premium over the standard iPhone 7, up from the $100 differential seen in the last two years.

RBC Capital has maintained its "outperform" rating with a price target of $117.
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Comments

  • Reply 1 of 36
    As long as the major carriers continue to offer free a upgrade to iPhone 7 when trading in an iPhone 6 or 6S, every single person holding an iPhone 6 and their brother will be clamoring for an iPhone 7. But how long can the carriers and Apple maintain this kind of promotion before their margins begin to fall?
    cali
  • Reply 2 of 36
    And there's also the realization that all those doom-and-gloom self-appointed Apple prognosticators don't really know what they're talking about.
    ai46tmayequality72521mejsric
  • Reply 3 of 36
    *sniffle sniffle sob sob* "But, but peak iPhone, what about peak iPhone" - analyst

    ai46chiamejsricwatto_cobra
  • Reply 4 of 36
    lkrupplkrupp Posts: 6,607member
    Okay, can we stop with the peak iPhone bullshit now?
    ai46
  • Reply 5 of 36
    lkrupplkrupp Posts: 6,607member
    tundraboy said:
    And there's also the realization that all those doom-and-gloom self-appointed Apple prognosticators don't really know what they're talking about.
    Yep, and don’t expect to hear any mea culpas from them either. Gotta feel sorry for those AAPL investors who took these ass hat’s advice and sold. But then stupid is as stupid does I guess.
    edited September 2016 ai46caliwatto_cobra
  • Reply 6 of 36
    I suspect the exploding Galaxy Note report are helping things change the base purchase decision.  
    edited September 2016 cali
  • Reply 7 of 36
    auxioauxio Posts: 1,949member
    schlack said:
    As long as the major carriers continue to offer free a upgrade to iPhone 7 when trading in an iPhone 6 or 6S, every single person holding an iPhone 6 and their brother will be clamoring for an iPhone 7. But how long can the carriers and Apple maintain this kind of promotion before their margins begin to fall?
    If/when carriers stop offering subsidies, it would likely hurt manufacturers of low-end devices ($0 Android-based phones) more than it would Apple.
    ai46chia
  • Reply 8 of 36
    sog35 said:
    Bought some extra shares a few weeks ago and sold them today.

    Pocketed about $1100

    Just enough to buy some AirPods in a few weeks.

    Still holding about 1000 shares. Think this will see $150 by the end of 2017. But not making any promises this time.

    Why will it reach $150? Cause Apple will show profit growth by the March2017 quarter. Then we will start seeing leaks of the iPhoneX and the hype will be at an all time high. Once this hits $150 I'll say all but about 400 shares.
    All depends on whether Apple can recover in China market. Heard a lot of chats from friends in China that they are all switching to smartphone made by Huawei. Will see. and Indeed the calendar Q1 2017/Q1 2017 will be setting the tone. 
  • Reply 9 of 36
    Doug Kass is losing his behind on his short position.
  • Reply 10 of 36
    gatorguygatorguy Posts: 19,805member
    rbonner said:
    I suspect the exploding Nexus report are helping things change the base purchase decision.  
    Exploding Nexus? Missed that story. Must be either very new or very old? 
  • Reply 11 of 36
    Apple should just change its name to iPhone, Inc. Stock rises and falls on iPhone sentiment. Nothing else matters.
  • Reply 12 of 36
    calicali Posts: 3,495member
    sog35 said:
    mubaili said:
    sog35 said:
    Bought some extra shares a few weeks ago and sold them today.

    Pocketed about $1100

    Just enough to buy some AirPods in a few weeks.

    Still holding about 1000 shares. Think this will see $150 by the end of 2017. But not making any promises this time.

    Why will it reach $150? Cause Apple will show profit growth by the March2017 quarter. Then we will start seeing leaks of the iPhoneX and the hype will be at an all time high. Once this hits $150 I'll say all but about 400 shares.
    All depends on whether Apple can recover in China market. Heard a lot of chats from friends in China that they are all switching to smartphone made by Huawei. Will see. and Indeed the calendar Q1 2017/Q1 2017 will be setting the tone. 
    Seems like preorder sales are strong in China....

    http://www.chinapost.com.tw/taiwan-business/2016/09/15/478474/Local-iPhone.htm

    "Studio A, an Apple Premium Reseller that has 33 outlets in Taiwan, said that so far it has received five times the number of pre-orders that it obtained for the iPhone 6S a year ago when that model was released."
    Geez!!! It's a smash hit!!!
  • Reply 13 of 36
    tmaytmay Posts: 3,386member
    gatorguy said:
    rbonner said:
    I suspect the exploding Nexus report are helping things change the base purchase decision.  
    Exploding Nexus? Missed that story. Must be either very new or very old? 
    I haven't heard a thing either.

    If Google actually does what some of us think they are going to do, and build a clean Android OS Premium device, then Samsung has a lot more problems that exploding batteries. They actually have a second vertically oriented, deep pocketed, competitor to deal with. It's a little late for Tizen to ride to the rescue.
    caliwatto_cobra
  • Reply 14 of 36
    calicali Posts: 3,495member
    tmay said:
    gatorguy said:
    rbonner said:
    I suspect the exploding Nexus report are helping things change the base purchase decision.  
    Exploding Nexus? Missed that story. Must be either very new or very old? 
    I haven't heard a thing either.

    If Google actually does what some of us think they are going to do, and build a clean Android OS Premium device, then Samsung has a lot more problems that exploding batteries. They actually have a second vertically oriented, deep pocketed, competitor to deal with. It's a little late for Tizen to ride to the rescue.
    I thought of this. The funny thing is both iWannabes lose because Sammy sales go down but no one wants a nexus either.

    Maybe Apple will gain sales from this?
    watto_cobra
  • Reply 15 of 36

    PRC (China) sales != Taiwan sales!

    Apple doesn't sell any of their OSes they (and upgrades) are  included with the hardware.


    edited September 2016
  • Reply 16 of 36
    sog35 said:
    Apple should just change its name to iPhone, Inc. Stock rises and falls on iPhone sentiment. Nothing else matters.
    and why is this a bad thing?

    Should we call Google Ads Inc?
    Or Tesla Cars Inc?

    The fact is Apple is much more diversified than either of those companies. And the lock in to Apple products including the iPhone is much more powerful.


    You can be giddy now but you certainly weren't when the stock was on a downward trajectory - again because of negative iPhone sentiment. This run-up right now is once again setting up unrealistic expectations on iPhone sales. If they don't exceed these expectations the stock will get hammered.
    SpamSandwich
  • Reply 17 of 36
    sog35 said:
    jcdinkins said:
    Doug Kass is losing his behind on his short position.
    Doug Kass is going to get absolutely SMOKED. Serves  him well.

    https://www.thestreet.com/story/13683159/1/doug-kass-trade-of-the-week-short-apple-calls.html

    Dude sold $100 and $105 naked calls. He is going to get CRUSHED.
    Yep you are correct sir.  Sometimes he's right, sometimes he's wrong.  This time he's very wrong.
    edited September 2016 caliwatto_cobra
  • Reply 18 of 36
    sog35 said:
    Apple should just change its name to iPhone, Inc. Stock rises and falls on iPhone sentiment. Nothing else matters.
    and why is this a bad thing?

    Should we call Google Ads Inc?
    Or Tesla Cars Inc?

    The fact is Apple is much more diversified than either of those companies. And the lock in to Apple products including the iPhone is much more powerful.


    You can be giddy now but you certainly weren't when the stock was on a downward trajectory - again because of negative iPhone sentiment. This run-up right now is once again setting up unrealistic expectations on iPhone sales. If they don't exceed these expectations the stock will get hammered.
    You're wrong because the iPhone 8 tailwind will help this stock keep moving upward.  I'm not saying every day pal.  I am saying that it's moved sideways for way too long.  I've been in this since $50 pre-split.  People will continue buying the rumor for the 8 and deal with any flat numbers on the 7.  However, flat numbers don't seem to be the case here.
    palomine
  • Reply 19 of 36
    gatorguy said:
    rbonner said:
    I suspect the exploding Nexus report are helping things change the base purchase decision.  
    Exploding Nexus? Missed that story. Must be either very new or very old? 
    Your right, I updated, exploding Galaxy Note.
    cali
  • Reply 20 of 36
    I thought it was due to the expectation of a massive iPhone 7s "mega-cycle" next year.

    I don't think it will be Christened iPhone 7s though; either iPhone 8 or Apple Phone.

    It's strange to me that smartphone manufacturers still call their products phones since they are more mini supercomputers capable of doing so much more. Unfortunately mini supercomputer doesn't exactly roll off the tongue!
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