Apple inches closer to erasing 2022 losses as inflation cools
APPLE is close to erasing its losses for the year as softer-than-expected inflation data fuelled a risk-on rally in the stock market on Wednesday (Aug 10).
The iPhone-maker edged 2.6 per cent higher to US$169.24 as investors piled back into stocks on bets the Federal Reserve could dial back the size of future interest-rate hikes after the July consumer price index showed a deceleration in growth from the prior month. Megacap tech stocks all rallied with Meta Platforms and Netflix leading the pack on a more than 5.8 per cent gain each, while the Nasdaq 100 Index advanced 2.9 per cent. The tech-heavy benchmark closed 20 per cent higher from its June low.
Since bottoming in mid-June, Apple's shares have surged about 30 per cent, outpacing the S&P 500 Index and the Nasdaq 100. That's put the tech giant back on top as the world's most valuable company and within reach of turning positive for the year. It is now down just 4.7 per cent in 2022, compared with a drop of 18 per cent for the Nasdaq 100.
The furious rally comes after the company posted quarterly earnings that were better-than-feared, and also reflects Wall Street's confidence in its ability to continue churning out big profits. Individual investors, who recently helped ignite rallies in speculative corners of the market, have also flocked to the stock.
Apple, which has a market value of about US$2.7 trillion, surpassed oil giant Saudi Aramco again in July to become the world's largest company.
The recent surge puts its shares back in the expensive camp, trading at 26.4 times profits projected over the next 12 months, well above its 10-year average at 16.7 times. That compares with the Nasdaq 100 which is priced at 23 times earnings and the S&P 500 at 17.8.
About 96 per cent of analysts covering the stock recommend investors buy or hold on to their positions, according to data compiled by Bloomberg, with an average forecast of a 6.9 per cent gain in its shares over the next 12 months. BLOOMBERG
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