Adam Satariano San Francisco
APPLE’S stock has soared to an all-time high, surpassing its 2012 record as investors look ahead to new products such as bigger-screen iPhones and a wristwatch-like device that may jump-start revenue growth.
Apple rose 1.4 percent to $100.53 (about R1 067) in New York on Tuesday, topping the split-adjusted record of $100.30 reached on September 19, 2012, just before the iPhone 5 went on sale. The shares, which have advanced 25 percent this year, extended their gains yesterday before the markets opened, trading as high as $100.98.
After rising more than sevenfold following the 2007 debut of its smartphone, Apple’s stock lost a third of its value in the year after the iPhone 5’s release on concerns that the company was running out of hit product ideas without co-founder Steve Jobs. The tenor has changed, with analysts estimating record sales for the next batch of iPhones, set to be released later this year.
Activist investor Carl Icahn, who had pushed Apple to buy back more of its own stock earlier this year, said the rise in the firm’s share price validated his earlier claim that the iPhone maker was undervalued.
“All my chips still on the table and in fact increased position over past year,” Icahn said in a Twitter post. Icahn owns 52.8 million Apple shares worth $5.3 billion, according to a recent filing.
In June, officials familiar with the plans said Apple planned to start mass production on two smartphones with larger screens, a response to devices from rivals such as Samsung Electronics and HTC.
The stock’s rise shows investors are buying into the strategy outlined by chief executive Tim Cook, who has been prodded to introduce bigger iPhones, give more money back to stockholders and introduce new devices.
Those shareholders are now getting what they want. In addition to the larger iPhones, Cook has vowed that Apple will enter a new product category this year. The company is said to be developing a smartwatch, and Morgan Stanley’s Katy Huberty has said Apple may sell as many as 60 million of the new wearable device in its first year on the market, adding up to $9bn in revenue for fiscal 2015. Apple has not commented on the prospect of larger iPhones or a possible smartwatch.
Cook also has been more open than Jobs was to using the company’s cash hoard to return money to shareholders.
Apple is in the midst of a programme to give back $130bn through buybacks and dividends.
He has also been more active in acquisitions, including spending $3bn to buy Beats Electronics, the company’s biggest-ever purchase.
Apple’s stock price makes it the world’s most valuable company – more than 30 percent bigger than Exxon Mobil, the second-largest by market capitalisation.
Meanwhile, Samsung, Apple’s biggest competitor, has seen its stock decline 8.6 percent this year. Earnings at the largest maker of cellphones have fallen for three consecutive quarters, pinched between competition with Apple for customers of high-end smartphones and Chinese manufacturers such as Xiaomi and Lenovo for less-expensive models. – Bloomberg