Millions saw the Apple Fall, but only Newton asked Why?
Typically, a beat in earnings will drive a stock price up after the market opens. But realistically, it's not uncommon to see a stock's price fall after beating earnings.
An interesting case to study is the brilliant Q2 and Q3 (2021) earnings results from $Apple (AAPL.US)$. The superb earnings were not as well-received by investors. Despite the strong quarterly results $Apple (AAPL.US)$shares fell.![]()
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If you are an $Apple (AAPL.US)$ investor who wondered after a remarkable Q2 and Q3 earnings report, why the value of your stock was going down rather than up…
The possible reasons -
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Warning that chip supply constraints could impact iPhones and iPads will weigh on the short-term outlook.
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Earnings may not seem good enough for an investor looking at every short-term opportunity to move funds to where the next quick buck is likely to be.
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Earnings were not as high as anticipated.
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Speculators already drove up the price in the days before the earnings report and then sold just before the report was released
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Stock markets are not always
rational.
Long-term investors (like myself), shouldn’t be too worried at all. $Apple (AAPL.US)$’s core businesses remain strong, it’s brand inspires fierce loyalty, and it has plenty of cash to fund its future expansion plans beyond the iPhones and iPads.
Surprisingly enough, share prices do dip after robust earnings release. Sometimes the expectation of beating earnings is already priced into the stock. The expectations of beating earnings was already “baked in.” If you look deeper, there might be some negative news that trumps the earnings beat. Or perhaps, the whole market dropped and the company was taken down with it.
There is no rule that the stock must immediately reflect the optimism or pessimism of quarterly results in the price. Fundamentals like profits, sales and everything else align with price only in the long term. In the short term, nothing is predictable or rational.
A strategy you might consider (carefully), if this is happening too consistently. To sell those stocks prior to the earnings release, then re-invest the principal and gains back into the market. You can usually find a way to hold cash in the stock market for a short period of time, if you invest through a fund.
Honestly, in the long run, these quarterly results don’t matter too much. The long-term success of the company is not determined by short-term graphs and charts.
Now, let’s anticipate eagerly for $Apple (AAPL.US)$ to announce Q4 earnings on 28 October 2021.![]()
![]()
An interesting case to study is the brilliant Q2 and Q3 (2021) earnings results from $Apple (AAPL.US)$. The superb earnings were not as well-received by investors. Despite the strong quarterly results $Apple (AAPL.US)$shares fell.
If you are an $Apple (AAPL.US)$ investor who wondered after a remarkable Q2 and Q3 earnings report, why the value of your stock was going down rather than up…
The possible reasons -
rational.
Long-term investors (like myself), shouldn’t be too worried at all. $Apple (AAPL.US)$’s core businesses remain strong, it’s brand inspires fierce loyalty, and it has plenty of cash to fund its future expansion plans beyond the iPhones and iPads.
Surprisingly enough, share prices do dip after robust earnings release. Sometimes the expectation of beating earnings is already priced into the stock. The expectations of beating earnings was already “baked in.” If you look deeper, there might be some negative news that trumps the earnings beat. Or perhaps, the whole market dropped and the company was taken down with it.
There is no rule that the stock must immediately reflect the optimism or pessimism of quarterly results in the price. Fundamentals like profits, sales and everything else align with price only in the long term. In the short term, nothing is predictable or rational.
A strategy you might consider (carefully), if this is happening too consistently. To sell those stocks prior to the earnings release, then re-invest the principal and gains back into the market. You can usually find a way to hold cash in the stock market for a short period of time, if you invest through a fund.
Honestly, in the long run, these quarterly results don’t matter too much. The long-term success of the company is not determined by short-term graphs and charts.
Now, let’s anticipate eagerly for $Apple (AAPL.US)$ to announce Q4 earnings on 28 October 2021.
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kat kukuuu : Apple, which is fighting against the gaming company Epic, has a new lawsuit a few days ago. The communications industry giant Ericsson recently filed a lawsuit in the Federal Court of Texas in the United States, asking the court to confirm that its 5G patent licensing rate is in line with FRAND requirements
HopeAlways : Let's cheer for the jacket success of $Apple (AAPL.US)$
HuatEver : I concur with you that we don’t have to be overtly anxious over $Apple (AAPL.US)$ shares prices dipping in the early Q4 phase.
HuatLady : As both of us are strong supporters of $Apple (AAPL.US)$ we are not too disturbed by a slight dip at this early phase of Q4. APPL shares should be ripened by X'mas for a delicious "apple pie." Don't you think so?
Syuee OP kat kukuuu : Well, these shall be yet another tests for $Apple (AAPL.US)$. Long term wise, $Apple (AAPL.US)$ remains one of the most valuable and resilient consumer facing companies in the world with an ecosystem of unparalleled size and a user base of unparalleled loyalty. Revenues are big. Long term investors would be wise to regard near term headwinds as nothing more than noise, and to consider taking advantage of the dip, if any.
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
$Apple (AAPL.US)$’s case is just an example, it could be any other good stock price dropping after beating earnings, by the way, not only $Apple (AAPL.US)$ …
Thank you for the communication. Wishing you all the Best and Happy Investing.
HuatLady Syuee OP : Well said Syuee it will be a test of time before we can decide on which company is more resilient to hearsay gossips.
Syuee OP HopeAlways : 3 Cheers![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
for $Apple (AAPL.US)$ and wishing it Every Success.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Syuee OP HuatEver : Thank you for sharing your view. May $Apple (AAPL.US)$ reports a solid Q4 earnings.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Syuee OP HuatLady : Absolutely true. That’s a good one. Perhaps, $Apple (AAPL.US)$ investors can all enjoy a delicious Apple pie instead of the traditional pumpkin pie or pecan pie for Thanksgiving this year.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Good luck to All and Happy Investing.
HuatEver Syuee OP : Yes seeing is believing. With regards to the allegations by Epic and Ericsson , let’s not decide on half baked truths. We shall await the final verdict of the federal court before jumping to conclusions.
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