Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Apple Rockets Back 4% -- What's Driving Today's Gains?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

On Friday, Apple  (Nasdaq: AAPL  ) closed 13.5% off the record high share price it hit on the day of the iPhone 5 launch day a month ago. That's a pretty stiff correction, especially for a company where investors are used to largely uninterrupted gains across the past year. Well, Apple found its way back into investors' good graces today, surging 3.97% on a day markets were largely flat. Let's take a look at today's news and what could be changing investor sentiment. 

Coming to our senses?
As my colleague Evan Niu noted on Friday, the company's recent sell-off looked absurd. Complaining about a monthlong sell-off of a $600 billion company whose shares are up more than 50% on the year might look like sour grapes; however, there are some intriguing aspects around Apple's recent swoon. 

For one, the sell-off in tech markets on Friday was driven in large part by earnings that fell short of expectations. Earnings across the space were far worse than expected, but they were driven by a common thread: the PC is in deep trouble. Microsoft  (Nasdaq: MSFT  ) reported fiscal first-quarter profits off 22%. Not only that, but across the supply chain, PC companies struggled. Advanced Micro Devices  (NYSE: AMD  ) saw its own shares plummet 17% and announced a restructuring. Windows 8 was supposed to "save" PCs, yet PC manufacturers are taking a cautious approach to the launch of the operating system while IT departments and consumers keep shifting spending to tablets and smartphones. 

The point here: The ills of the PC industry are the result of Apple's influence. Selling off the company because of tech-sector woes seems to be missing the point that Apple's not a stampeded company fleeing a weak tech market, it's the big cat causing the stampede.

iPad Mini mania?
Another area that could have contributed to more optimism around Apple is the nearly certain unveiling of the iPad Mini tomorrow. On the precipice of the device's media event tomorrow, there was plenty of positive analyst chatter, including a note from an analyst at Topeka Capital that he'd handled a reported prototype at a supplier in China. 

At the end of the day, even at a $300 price point that's above the level (Nasdaq: AMZN  ) is pricing its entry-level Kindle Fire or other entry-level Android devices, the iPad Mini attacks a segment where Apple has been weakest and there seems to be ample consumer demand.

Also, if Microsoft is really charging its traditional rates for desktop versions of Windows on the Windows RT tablets hitting the market (reports put them north of $85 for smaller players, though larger companies such as Hewlett-Packard and Samsung certainly pay less), Apple's entry at the $250-$350 price level means it has economics Windows tablets simply cannot beat without losing money. With the added costs associated with paying for Windows, tablets running Windows RT will have to attack the same levels as the 9.7-inch iPad, which has historically been a losing proposition. 

More Mini guidance?
Looking for more iPad Mini guidance? We've just released an exclusive update that looks at just how important the iPad is to Apple, and how the iPad Mini fits into the company's long-term goals of tablet domination. By picking up a copy of our premium research report on Apple, you'll learn everything you need to know about the launch and receive ongoing guidance as key news hits. Claim your copy today by clicking here now.

Eric Bleeker has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple,, and Microsoft. Motley Fool newsletter services recommend Apple,, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 22, 2012, at 8:13 PM, H3D wrote:

    "That's a pretty stiff correction, especially for a company where investors are used to largely uninterrupted gains across the past year. "

    Apple took a 17% correction in May after the last rally. 13% is below a average for a rally of this size.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2069543, ~/Articles/ArticleHandler.aspx, 10/27/2016 6:57:30 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
AAPL $114.48 Down -1.11 -0.96%
Apple CAPS Rating: ****
AMD $7.11 Down -0.18 -2.47%
Advanced Micro Dev… CAPS Rating: **
AMZN $818.36 Down -4.23 -0.51% CAPS Rating: ****
MSFT $60.10 Down -0.53 -0.87%
Microsoft CAPS Rating: ****