Apple Inc. (NASDAQ:AAPL) has taken a bit of a breather this month after a terrific run. Apple stock gained 30% just between November and early March, and is up over 50% from late June levels.
The latter run, incredibly, has added about $250 billion to the market value of AAPL stock.
Part of the gains have come from the fact that AAPL was just too cheap, particularly below $100 this summer. But optimism toward the iPhone 8 has boosted hopes that Apple stock can jump-start growth. (The issues at key competitor Samsung Electronics (OTCMKTS:SSNLF), including the Galaxy Note 7 debacle, likely have helped as well.)
So the question now for AAPL is when the iPhone 8 is coming – and how much upside might be left from a successful launch and product cycle.
For now, it looks like there’s still some gains left for Apple stock … but investors might need to have some patience.
Will the iPhone 8 Move Apple Stock?
At the moment, it appears the iPhone 8 will be launched this fall, according to various reports. But Apple has said little about the launch, leaving a guessing game for observers and investors. Even the name isn’t clear: The next phone seems likely to be called the iPhone 8, not the 7S, but that’s not assured at the moment.
Most observers are expecting an iPhone 8, rather than a 7S, because the next-gen product will have major changes. The most notable was thought to be a curved OLED screen, but those reports have been questioned of late. Iris recognition, facial scanning, and a larger screen (on a phone of similar dimensions) are all expected to be features of various versions of the phone.
What might be most interesting for Apple stock is the price. On Monday morning, Instinet analyst Jeffrey Kvaal said supplier prices supported a possible $1,000 price for the new iPhone. Other reports of a high-end “Edition” have speculated an ASP over $1,200. Higher prices for iPhones mean higher margins for Apple — and likely a higher multiple for AAPL stock.
Will Investors Buy the Leaks and Sell the News?
The biggest worry ahead of the launch is if there will be a “buy the rumor, sell the news” reaction from investors.
It is clear that some of the optimism over the past few months, in particular, has been driven by consumer reaction to the leaked specs for the new iPhone. Indeed, Apple stock traditionally has been moved almost solely by iPhone sentiment. Sales of other products have been pretty much flat the last four years.
So if there is a large base of investors bidding up the Apple stock price ahead of the iPhone 8, the question then becomes: What might happen in September when the product actually is released?