Apple Inc. (NASDAQ:AAPL) Stock Jumps Following President Trump’s Tweet On China-US Trade Talks
On Friday last week, Apple Inc. (NASDAQ:AAPL) jumped to record high of$236.88 in trading hours. The last time the iPhone maker’s stock hit such record high was in October 2018 when it reached $237.64. Currently the stock trades at $235.28 with a market cap of around $1.06 trillion
Source: Stockcharts.com
Other technology stocks such as Amazon.com Inc. (NASDAQ: AMZN), Intel Corp (NASDAQ: INTC), and Microsoft Corp (NASDAQ: MSFT) also gained. This was a result of President Trump’s tweet about the ongoing China-US trade talks.
Apple faces concerns of a tax hike
China is an important market for theUS tech companies. For instance, Apple garnered sales of around $44 billion in China in the last 12-month period ended in June. Apple stares at a 25% tax hikes on its products from China if the trade talks do not result in a deal. This will force the company to foot the bill of the increased tariffs or pass it to consumers as added costs.
The company also faces concerns regarding its privacy policy when it comes to China. Apparently, Silicon Valley’s privacy Patron Saint shows double standards when it comes to China. Recently the company took of HKmap.live from its App store following criticism that Hong Kong protesters were using it to track police. This shows that the company’s human rights virtues, security, and privacy have a limit when it comes to China.
There is the talk of a possible downturn which is worrying for investors. However, with that said Apple still looks attractive and is among the stocks which tech stock investors should watch. Here is why
Read More: US-China Trade War: China’s exports to the US fell by 16% in August
Apple stock fairly valued
Apple has a P/E of around 19 compared to other tech companies like Amazon and Facebook whose P/E is 90 and 25 respectively. Although the stock could drop in a recession just like any other stocks it, however, won’t suffer long-term losses because of its current buy value. Its fair valuation indicates that after a downturn it could recovers faster if the economic situation improves.
Strong fundamentals
The company is in a strong financial position and in the quarter ended June it reported revenue around $53.8 billion with an EPS of $2.18. Apple’s YoY business performance grew relative to the quarter ended March with strong cash flow of around $11.6 billion. Apple will not have problems paying dividends because of this cashflow.
Over the years Apple has been a great stock buy and it continues to demonstrate steady growth. Strong financial and a loyal user base puts Apple in a position to do well even in a recession.
