Written by Aditya Soni
(Reuters) – Apple shares rose to 7.7 on Friday as the iPhone maker’s record share buyback plan and promises of higher sales brought back investors who had shunned the stock over concerns about weak demand and increased competition in China. increased by nearly %.
The company late Thursday approved a record $110 billion in additional stock buybacks and announced third-quarter revenue guidance that beat modest market expectations.
If the stock price continued to rise, the company was expected to increase its market capitalization by more than $170 billion.
The forecast comes as Apple’s product updates starting with its May 7 iPad event will boost demand for its hardware business after months of slowing growth that made some investors question its status as a stock to own. He showed that he was confident.
“Many investors were beginning to question whether Apple still had the capabilities necessary to achieve the peak growth we’ve been accustomed to for years,” said Josh Gilbert, an investment analyst. “The CEO saw its appeal and gave investors peace of mind.” eToro platform.
The share buyback brings Apple in line with other U.S. tech giants that have poured cash into investors this earnings season to allay concerns about increased investment in generative AI. Some analysts saw this as a sign that the industry was maturing.
“Growth stocks have to prove they’re growing at a pace that satisfies shareholders,” said Danny Hewson, head of financial analysis. “Buying and dividends can persuade investors to remain confident.” At AJ Bell.
Unlike Alphabet and Microsoft, Apple hasn’t made any major AI investments, so it hasn’t seen its costs soar. But investors have criticized the slow rollout of its AI services, which contributed to a 10% drop in the company’s stock price this year.
CEO Cook said Apple plans to share “some very exciting things” in what several analysts say is Apple’s largest year of development on record. This fueled expectations that he would announce AI integration at the conference.
Bernstein analysts said they expect a “strong iPhone 16 cycle driven by AI capabilities and long replacement cycles.”
At least 13 analysts raised their price targets for Apple, with the median view rising to $200, 15% higher than the stock’s previous closing price.
Apple’s stock trades at 25 times trailing 12-month earnings, compared to Microsoft’s 30.5 times. The Windows maker snatched the world’s most valuable company crown from Apple earlier this year thanks to its AI efforts.
(Reporting by Aditya Soni in Bengaluru; Editing by Arun Koyur)
