May 13, 2015 — by: E. Werner Reschke
Categories: Financial Results, iOS, MacBook, Apple Watch, Apple Pay

AAPL 2015

Apple’s stock has been stuck at the $120-130/share range for the past several months. It’s peak was $134.45 back in February. But since that time the stock has been relatively flat when compared to the previous year of continual growth.

Despite a great quarterly earnings report and increased dividends per share, the stock remains immune to the good financial news.

Many are waiting to see if Apple Watch lives up to its hype. Apparently investors are being cautious with more of a wait-and-see approach when it comes to this new device. Apple Pay is also new, and while available in select shops, Apple Pay is not yet universally accepted by retailers which curbs the enthusiasm for Apple Pay as a true game changer.

Moreover, Apple Watch’s poor inventory management and launch strategy did not help boost investor confidence. Gold Edition Apple Watches were given to fashion designers who did not have a clue how to use them while the average Joe has been continually disappointed because one still cannot purchase Apple Watch in store and walk out with it on their wrist.

Perhaps WWDC 2015 will help bolster confidence as Tim Cook typically gives a product update as to how well particular items are selling and being accepted by the market. Hopefully by next month inventory problems with Apple Watch, and the new 12" MacBook will be a thing of the past. It is good to see such strong demand, but if Apple cannot meet that demand, it is dropping sales and giving competitors a chance to catch up. Neither of those are comforting to investors.

Microsoft is making big noise with its soon-to-launch Windows 10 offering. For many years Apple has enjoyed success after success while Microsoft has made one mistake after another. Investors are watching to see if the tide will change with new CEO Sayta Nadella’s all-in Windows 10 strategy or whether Apple’s strong Mac and iOS sales will continue without interruption.

Mostly whether AAPL reaches $150/share within the next six months all depends upon if Apple can meet demand for their latest two new products. If so, if this shortage is merely a short term issue and is solved by WWDC 2015, then we think AAPL will start its climb again towards the $150 price point. If not, do not expect much growth from this stock until inventory catches up with demand.

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