SSNLF - Apple's Disastrous Q2 2024 Results Overshadowed By $110B Buybacks
2024-05-02 18:15:09 ET
Summary
- Apple Inc. stock has shown increased volatility lately due to extended company-specific woes, particularly in the face of rising competition in China.
- The company's March quarter revenue declines continue to highlight risks of persistent market share loss in its key iPhone and Mac segments, despite an impending PC and smartphone recovery.
- Apple's uncertain AI strategy and lack of growth initiatives also poses risks to its valuation outlook.
- With continued uncertainties to its fundamental prospects, the confidence stemming from Apple's approved buybacks is likely to wear off soon.
Apple Inc. ( AAPL ) has shown increased volatility this year. In addition to investors rotating in and out of haven trades amid the ongoing AI frenzy, Apple also faces company-specific woes that have been weighing on its valuation prospects. Yet, the March quarter double beat , albeit a low bar to clear, was further boosted by the board’s authorization of an additional $110 billion in share buybacks. This has sent the stock surging in post-market trading, despite low expectations, and management’s modest commentary for the current period’s outlook.
Although the stock has surpassed its peak valuation twice, it has failed to sustain a $3+ trillion market cap. This is consistent with our previous concerns that Apple lacks the growth and profitability profile to sustain such a lofty premium over its megacap peers. And the ballooning headwinds facing its business over the past year – particularly in China, the largest smartphone market in the world – further clouds the potential for any near-term respite....
Apple's Disastrous Q2 2024 Results Overshadowed By $110B Buybacks