Here's Where the Portfolio May Buy More Apple Shares
Data from Counterpoint Research shows consumers are lapping up Apple’s Pro iPhones.
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* Apple’s manufacturing partner Foxconn posts a 19% YoY jump in April revenue
* Data from Counterpoint Research shows consumers are lapping up Apple’s Pro iPhones
* Here’s our plan for AAPL shares ahead of tomorrow’s iPad event
Early this morning, one of Apple’s AAPL key manufacturing partners Hon Hai HNHPF, better known to many as Foxconn, reported that its April revenue soared 19% year over year. Those impressive gains were chalked up to “strong growth” in cloud and networking products as well as “significant growth” year over year for the company’s smart consumer electronics segment, which includes smartphones.
Examining Hon Hai’s recent monthly reports, we find another positive data point in its April trailing three-month revenue turning positive, up more than 6% year over year, compared year over year declines for the four preceding months.
This is a positive for not only our shares of Apple, Nvidia NVDA, and Marvell MRVL, but also Qualcomm QCOM and Universal Display OLED.
Ahead of Apple’s iPad-centric event tomorrow, the company and our shares received yet another piece of good news. Data from Counterpoint Research showed the iPhone dominated the smartphone market during 1Q 2024. The iPhone 15 Pro Max led all smartphone sales for the first quarter, capturing 4.4% of the global market. It was followed by the iPhone 15, iPhone 15 Pro, and the iPhone 14 to round out the top four.
What stands out is Apple’s iPhone Pro lineup captured, according to Counterpoint’s findings, half of Apple’s total smartphone sales in 1Q 2024, up from 24% in 1Q 2020. This helps explain Apple’s ability to swim upstream in the premium segment, but also surprise to the upside when it comes to iPhone revenue vs. industry shipment data.
We can add this to last week’s favorable data points, which have not only pushed AAPL shares higher but driven more than a fair amount of short covering. Going into Apple’s earnings report last week, the last data point from Nasdaq showed there were 56.9 million shares short with an estimated 1.79 days to cover. On Friday, more than 94 million AAPL shares traded, well above the 61.7 million average. That helps explain the extremely strong reaction to Apple’s record-setting buyback announcement last week.
Tomorrow brings Apple’s iPad-centric event, at which it will showcase several new models, including at least one with an organic light-emitting diode display. We see that as a catalyst for our Universal Display shares, but should the Apple event come up lite on AI-related news, we could see Apple’s shares trade-off in response.
In our view, the event that will have a far greater impact will be Apple’s upcoming WWDC event in June. That event will showcase Apple’s next iteration of product software and should see the company make a bigger splash when it comes to AI.
We’d note that AAPL shares have strong support between $180-$181 with both the 100-day and 200-day moving averages. If AAPL shares hold that level following tomorrow’s event, we may be inclined to scoop up some shares.
If the shares don’t hold that level, the next layer of support comes at the 50-day moving average near $173. While it may seem counterintuitive, a pick-up close to $173 would be a nice get ahead of the WWDC event and the upcoming AI-on-device upgrade cycle.
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At the time of publication, TheStreet Pro Portfolio was long AAPL, NVDA, MRVL, QCOM, OLED.
