Chart of the day: Apple earnings show the tech giant is firing on all cylinders
With the market treated to Apple’s Q1 earnings report, investors would be pleased with what they have seen, and the share price reacted, hitting a high of $327 in after-hours trade, before closing 1.9% higher at $323.
The moves (in Apple) have helped lift NASDAQ futures and the positivity should spill into Apple’s suppliers through Asia and Europe.
The iPhone is back they cry and looking at the growth in demand for the iPhone 11 it’s clear that demand for iPhone’s is increasing, with the tech giant recording 7.6% iPhone sales growth in Q1. Importantly, at $55.96b, sales of iPhones easily beat consensus expectations of $51.50b, with total revenue coming in at $91.82b, 3.9% above consensus.
Q1 EPS printed $4.99, against expectations of $4.56, which was also well above the top estimate of $4.85. Looking forward, Apple guided Q2 revenue of $63 to $67 billion, which (if we use the midpoint) is 4.3% above the streets forecasts and an upgrade of 12% y/y. We can also look at Q2 gross margin guidance, as a metric for the firm’s profitability, and on forecasts of 38%-39%, this looks healthy relative to expectations too.
The company is clearly in a solid position and the investment case stacks up that traders will be happy to buy any weakness. At $323 we will likely need to see analysts upgrade earnings forecasts or it seems a stretch to think the stocks will push materially higher from here and will need the macro backdrop to continue to inspire to maintain current levels. A quick look at the trend and technical set-up though and the risks are still skewed to the upside.
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