Analysts at Needham believe investors turned to Apple Inc on Tuesday because the company has huge cash flow, allowing it to withstand the risk of an economic slowdown. Analysts at Bernstein expect Apple Inc to continue to buy back shares over the next five years.
In Tuesday's sharp fall in U. S. stocks, Apple Inc shares outperformed others, rising 3.16% against the market.Other stocks plummeted on concerns about the new Omicron mutant virus, suggesting that investors see the stock as a safe haven in times of market uncertainty. Analysts believe this is due to Apple Inc's strong cash flow and innovative products.
Other large technology stocks, such as Alphabet Inc-CL C, Amazon.Com Inc, Meta (former Facebook Inc) and Microsoft Corp, all closed down in the broader sell-off. After Federal Reserve Chairman Colin Powell said he would discuss accelerating bond purchases at the December meeting, the Dow Jones Industrial average (Dow Jones Industrial Average) fell 652 points, the technology-heavy NASDAQ composite index fell 1.6%, and the S & P 500 index fell about 1.9%.
Needham analyst Laura Martin (Laura Martin) thinksInvestors turned to Apple Inc on Tuesday because the company has huge cash flow, allowing it to withstand any economic slowdown and take advantage of falling prices.
"people are fleeing to high-quality companies, and you know they will weather the storm, they will not go bankrupt, they will not have financial difficulties," she said, pointing out that other large technology stocks have not fallen as much as small companies.
Martin added that Apple Inc is preparing to launch new products to drive new growth, including an AR/VR helmet.
"in the past five years, the biggest criticism of Apple Inc is that there are no new products," she said. When you see the product channel, you will find that there are a lot of exciting things there, especially today's media reports that they will launch augmented reality glasses at the next Global developers Conference in June next year. "
Martin said there are signs that Apple Inc's current products, especially iPhone's Pro model, are selling well, which could lead to a strong performance for the company's first fiscal quarter to the end of December. Apple Inc said in October that revenue in the first quarter was expected to exceed last year's $111.4 billion despite tight supply.
"the retail industry has a lot of very good data on product sales," Martin said. Tablets, especially high-end iPhone, all indicate that they will have high profit margins and high income in the fourth quarter of this year (Apple Inc's first quarter). "
Apple Inc's cash flow is not only used to invest in new products, but also to return the money to shareholders through dividends and buybacks, which helps keep share prices stable. Earlier this month, Bernstein analyst Tony Sacconaghi said in a report to investors that he expected Apple Inc to continue to buy back shares over the next five years.
Edit / Anita