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Why Apple Stock Jumped on Monday

By Daniel Sparks – Aug 31, 2020 at 2:42PM

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Investors seem to love the tech giant's stock split.

What happened

Shares of tech company Apple (AAPL -0.34%) jumped on Monday, rising as much as 5%. As of 2:03 p.m. EDT, the stock was up 4.7%.

The stock's gain follows the company's stock split. Shares of the tech company started trading on a split-adjusted basis Monday morning. While the stock split may be one reason for the stock's sharp gain on Monday, optimism may also be fueled by some bullish notes from analysts.

A person's hand uses a red pencil to show a stock price rising on a chart.

Image source: Getty Images.

So what

Shares of Apple split on a 4-for-1 basis, finalizing a move that was announced at the end of July. Management said it split the stock to make its shares available to a wider base of shareholders.

A lower price tag on the stock seems to have helped drive more interest in Apple shares. The stock has been rising sharply ever since the stock split was announced -- and Monday's move extends this momentum.

Also serving as a catalyst for the stock on Monday: Argus analyst Jim Kelleher increased his 12-month price target for the stock from a split-adjusted price of $112.50 to $150. Additionally, an Evercore ISI analyst reiterated an outperform rating and a split-adjusted $130 price target. Both analysts cited the rollout of 5G and Apple's expected launch of a 5G iPhone as key catalysts on the horizon for Apple.

Now what

Investors should keep in mind that a stock split doesn't make Apple shares more attractive than they were before the split. Each split Apple stock will have a fourth of the ownership in Apple's business that a pre-split share had. Nevertheless, a stock split seems to have triggered an uptick in interest for the tech giant's shares.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.

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