Apple Inc. Hits New All-Time Highs. What’s Next?

AAPL stock - Apple Inc. Hits New All-Time Highs. What’s Next?

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The world’s single most important stock and the largest U.S. issue in terms of market capitalization — tech giant Apple Inc. (NASDAQ:AAPL) — is continuing its post-earnings melt-up on Monday. In fact, AAPL stock is pushing to fresh record highs after eclipsing its early 2015 peak of $129.36 last week.

How to Trade Apple Inc. at New All-Time Highs
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The catalyst for Apple stock was better-than-expected quarterly results featuring a return to growth for the critical iPhone after a few quarters of declining sales. Despite criticisms over the loss of the analog headphone jack and the continuance of the 3-year-old iPhone 6 form factor, the iPhone 7 has been a surprising hit.

The buzz is building big-time for the expected launch of the all-new iPhone 8 later this year. Reports have been circulating that the new handset will debut exciting new features such as a wireless charging station that might allow users to charge the device from 15 feet away.

So, where does AAPL stock go from here?

RBC Capital Markets analysts surveyed investors over the last few weeks and discovered a few interesting takeaways that suggest prices could continue to grind higher from here.

  1. Many investors were neutral to underweight Apple stock heading into earnings on expectations of a modest pullback. Now, they’re debating whether they should build larger positions or wait for a pullback, possibly in anticipation of an air pocket of iPhone 7 demand in the second quarter.
  2. Some hedge funds were using AAPL stock as a short play while holding longs in related component supplier stocks. Those trades are underperforming now, resulting in some short covering demand for shares.
  3. Given Apple’s large cash holdings, there could be a surprise announcement at some point related to capital return to shareholders that could potential push shares toward the $180-a-share level.

More modestly, Goldman Sachs upped its price target on AAPL stock to $150, which still is about 14% higher from here.

AAPL stock chart view 1

Apple will next report results on April 25 after the close. Analysts are looking for earnings of $2.11 per share on revenues of $54.1 billion.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.

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