Shares of Apple (AAPL +2%) hit new all-time highs today, driven by several positive developments:
- Bloomberg reported Apple reached $8.0 billion in sales in India.
- Loop Capital upgraded Apple to "Buy" from "Hold," citing its potential to lead in AI-focused consumer tech.
- International Data Corporation's preliminary data showed a 6.5% year-over-year increase in the global smartphone market for Q2, marking the fourth consecutive quarter of shipment growth.
Apple has surged around 40% since its Q2 results, fueled by investor excitement over the potential sales boost from incorporating AI into its iPhone and iPad products. Although the company's newest operating system hasn't been released yet, the market anticipates it will drive renewed demand. This impact may not be evident in Q3 results, set for release on August 1, but could appear in Q4 or even 1Q25 figures with the retail launch of iOS 18 later this year.
- Reports of significant growth in other key areas keep investor optimism high. Apple saw a 33% revenue jump in India over the past twelve months through March, highlighting its strong performance in this market.
- India has been a standout for Apple, showing double-digit growth in Q1 and Q2 and achieving record quarterly sales. CEO Tim Cook has emphasized India's importance, noting its exciting potential and focus. Emerging markets, including regions in Latin America and the Middle East, have also contributed to Apple's quarterly revenue growth.
- Apple is not only selling its products in India but also producing them there to diversify its supply chain, which faced significant disruptions in China during the pandemic. Cook noted that production in India is crucial for competitiveness in the region.
- Despite a small market share in India's Android-dominated smartphone market, Apple aims to replicate its success in China, where it gradually gained market share. With demographics similar to China, India offers substantial revenue potential for Apple.
As Apple reaches new highs, it faces high expectations for its Q3 results. If emerging markets like India continue their growth and developed nations like the U.S. recover, especially with the excitement around AI, Apple is well-positioned to maintain its upward momentum.
