Apple, Inc. Stock This Week: Why Shares Hit a 52-Week High

With Apple's third quarter now in the rearview mirror, it's time to look at the stock. What's driving it's massive gains, and is the stock still a buy?

Jul 26, 2014 at 8:00PM

Helped by a solid third-quarter report, Apple (NASDAQ:AAPL) shares hit a new 52-week high this week of $97.88 -- only a few dollars shy of Apple's post-split all-time high of $100.72. That makes for a gain of about 55% in the past 12 months.

AAPL Chart

AAPL data by YCharts

There were two major factors that drove the stock higher this week. The main driver, of course, was Apple's earnings. Let's review the numbers.

Apple's third-quarter earnings
Apple posted solid results on Tuesday. While revenue came in slightly below estimates, and iPhone unit sales were in line with estimates, a better-than-expected gross profit margin of 39.4% versus Apple's guidance for a range of 37% to 38% helped Apple to still match earnings-per-share estimates in spite of the lower-than-expected sales.

Apple's continued gross profit margin improvement, iPhone sales growth, and share repurchase program are helping alleviate concerns about Apple's bottom-line growth rates. Its reported 20% year-over-year growth rate for EPS shows the company hasn't peaked out its earnings potential -- a central conclusion behind the bear case in 2013.

AAPL Normalized Diluted EPS (Quarterly YoY Growth) Chart

AAPL Normalized Diluted EPS (Quarterly YoY Growth) data by YCharts

While shares initially traded slightly lower in after-market hours when Apple's third-quarter report was released, the market turned positive by market opening the next day, sending the shares up about 3%.

AAPL Price Chart

AAPL Price data by YCharts

Optimistic expectations for new products
After the report settled, analysts seem to have turned their attention to Apple's fall product launch season. While Apple's conservative guidance for its fourth fiscal quarter suggests these new products many not see the light of day during Q4 -- or at least not for a meaningful portion of the quarter -- it will be the latest-generation Apple products that will drive Apple's business in fiscal 2015, particularly the rumored iPhone 6

Consider ISI analyst Brian Marshal (via Fortune), who is bullish on Apple thanks to the iPhone 6. He thinks the next-generation iPhone line is likely to be a huge driver for Apple's business.

We know of few technology companies that can afford to be ~2 years behind the market on key trends (e.g., move to large ~5" display iPhones) and still be relevant in the market, especially when it comes to consumer electronics. In our view, it's hard to overstate the value of AAPL's ecosystem assets (e.g., iTunes, iCloud, App Store, etc.). ... Importantly, we believe the power of these assets is about to be unlocked when AAPL releases a large-display iPhone later this quarter. In our view, this is likely to both entice Android users back to the iPhone and drive massive upgrades in the installed base.


iPhone 6 concept. Design by Tomas Moyano and Nicolas Aichino.

Then there's the rumored iWatch, of course, which also is speculated to launch this fall.

Apple's huge 36% sequential increase in total off-balance sheet commitments to third-party suppliers, component orders, manufacturing tooling, research and development, advertising, and Internet and telecommunications equipment revealed in the Q3 10-Q filing support this notion that Apple has big plans for its new products this fall.

And a report from The Wall Street Journal this week, asserting that Apple has put in orders to partner suppliers in Asia of an unprecedented 70 million to 80 million iPhone 6 devices, also suggests Apple is ambitious about its fall launch.

Given Apple's conservative valuation in light of its big product plans, Apple stock offers enticing value at levels around $100 for investors with a long-term time horizon.

Risk-free for 30 days: The Motley Fool's flagship service
Tom and David Gardner founded The Motley Fool over 20 years ago with the goal of helping the world invest ... better. Their flagship service, Stock Advisor, has helped thousands of investors take control of their financial lives and beat the market. Click here to sign up today.

Daniel Sparks owns shares of Apple. The Motley Fool recommends and owns shares of Apple. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers