Apple Stock Has More Room to Run Beyond Latest Earnings Blockbuster

Apple (NASDAQ:AAPL) reported its first quarter earnings last Thursday. There had been real concern over the company’s holiday quarter. Supply chain disruptions were making iPads difficult to find in stores. Apple reportedly issued a warning to suppliers early in December about weakening demand for the iPhone 13. There was very real concern that after being beat up through January as the market turned on tech stocks, AAPL stock was going to drop even further in the wake of those holiday results.

Close-up of Apple (AAPL) retail store Logo in Honolulu at the Ala Moana Center. Advertising the latest generation of the ipad, iphones, and ipods with a Retina display.

Source: Eric Broder Van Dyke / Shutterstock.com

Surprise! Apple instead delivered a killer quarter featuring all-time record-beating revenue.

In response, AAPL stock shot up nearly 7% on Friday. That’s the biggest single-day jump for AAPL stock since July 2020.

Despite the big leap, the cumulative drops throughout January have still taken a toll, meaning Apple shares remain down 6.4% since the start of the year. If you’ve been wanting to add Apple stock to your portfolio but have been waiting for the 2022 dip to bottom out, now might be the time to make your move. That’s especially true when you see everything the company is expected to released this year.

Apple’s Q1 Earnings Blow Past Expectations

On Jan. 27, Apple reported its Q1 2022 earnings. The following day, AAPL stock rocketed to a 6.98% gain. Here’s why the market was so happy with Apple.

Despite concerns about demand drying up for the iPhone 13, Apple sold a ton of them. $71.63 billion worth to be exact, which is 9% more than the year ago quarter. Services (Apple Music, Apple TV+ and others) was on fire with $19.52 billion in revenue for a 24% gain. In fact all divisions saw significant YoY gains except for the iPad. It turns out that the supply chain did hit iPads badly, resulting in a 14% year-over-year drop in revenue for that division.

Overall, the company reported a record $123.95 billion in revenue. That was an 11% YoY gain, and it demolished Wall Street estimates of $118.66 billion. Speaking of crushing estimates, Apple’s earnings-per-share for the quarter of $2.10 (up 25% YoY) was far over the $1.89 Wall Street was looking for.

In short, it’s no surprise that AAPL stock popped.

Apple Expected to Roll Out Many New Products in 2022

Apple is expected to kick off its 2022 product release season shortly with a spring event. At least one noted Apple analyst is calling for the “widest array” of devices to be released this year in company history. Among the new product releases expected in 2022 are:

  • Four new iPhone 14 models
  • 5G iPhone SE
  • New entry-level MacBook Pro
  • Redesigned MacBook Air with M2 processor and color options
  • A larger iMac
  • Refreshed iPad Air
  • Refreshed low-end iPad
  • Redesigned iPad Pros with M2 and wireless charging
  • New Mac Pro
  • Three new Apple Watch models including a rugged model
  • Second gen AirPods Pro

In addition, there are reports the company is about to turn the iPhone into a tap payment terminal for small vendors — no additional hardware required. The prospect of this sent Block (NYSE:SQ) shares down amid fears its Square credit card payment readers will take a big hit.

These are just the major releases that are known or highly suspected. There will also undoubtedly be plenty of minor revisions. In fact, earlier in January, Apple filed for regulatory approval of nine new iPad models and three iPhones. 

Apple has momentum going into 2022, and that should only build through the year as the new products hit store shelves. And that’s going to provide a tailwind for AAPL stock.

Apple Likely to Release an AR Headset Next Year

Apple is known to be working on an AR headset. It would not be a pioneer in this space but instead is doing what Apple does repeatedly. AAPL takes an existing product released by competitors, studies its pain points, perfects the technology, then releases an upscale version of it. This is the playbook that made the iPhone, iPad, iPod, Apple Watch, AirPods and other Apple products such successes. 

The company teased the metaverse during its Q1 earnings on Thursday. Apple already has over 14,000 AR apps available on the App Store. With all the hype around the metaverse, it’s not unreasonable to think that an Apple AR headset might be the next AirPods — if not iPhone.

The Apple AR headset had been expected for 2022, but the best bet is now that it will see a 2023 launch. 

Bottom Line on AAPL Stock

At this point, AAPL stock earns a “B” in Portfolio Grader. I don’t expect that a company of this size is going to deliver spectacular gains. However, I do think that Apple has repeatedly proven that it isn’t running out of ideas or steam. We’ll see that play out with a flood of new products this year.

2023 should see a revolutionary new AR headset to take on the metaverse. Shareholders are likely to be rewarded with ongoing growth. The investment analysts polled by the Wall Street Journal have a consensus “overweight” rating for AAPL stock, with a $188.83 price target.

And don’t forget the dividend. With a current dividend yield of 0.52% it’s not going to make a list of high-paying dividend stocks any time soon. But the regular quarterly dividend payment sweetens the pot for AAPL stock.

Those spectacular Q1 earnings were Apple’s first shot across the bow for 2022. Now it’s time to sit back and watch the parade of new products, and the inevitable march toward a $3 trillion market cap for AAPL stock.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.


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