Apple (AAPL) shares opened at an all-time high Friday, breaching the $3 trillion market value threshold for only the second time on record, as megacap tech stocks continue to tighten their grip on U.S. stock performance.
Apple was given an added late-quarter boost from Citigroup as well. The bank initiated coverage of the iPhone maker with a buy rating and a $240 price target. Its analysts estimated 30% upside for the stock at current levels based on solid handset sales and rising service revenue.
Better-than-expected iPhone sales of $51.33 billion powered overall group revenue for Apple over the fiscal second quarter, which ended in March. But its top line still slipped 2.5% to $94.84 billion. Revenue from Apple's key services business rose 5.5% to $20.91 billion.
Apple 'Navigating the Macro Slowdown': Citi
"Apple is navigating the macro slowdown and inflationary pressure on consumer spending by consistently gaining share from Android (GOOGL) phones," said Citigroup analyst Atif Malik.
"We believe [Wall] Street is underestimating continued gross margin expansion, driven by a shift in iPhone sales mixed to higher average selling prices from Pro/Pro Max models, further share gains in China and India, continued self-design of cellular chips to reduce bill of materials costs and higher margin services sales mix," Malik added.
Apple shares were last marked 1.3% higher in the opening hour of trading and changing hands at $192.74 each, after hitting an all-time high of $192.79 each earlier in the session.
The move has extended the stock's year-to-date advance to more than 48% (based on the Dec. 30 closing price) and now values the Cupertino, Calif., tech giant at just over $3.02 trillion.
Apple reached the $2 trillion threshold in August 2020, thanks in part to a surge in iPhones and Mac sales linked to the global pandemic. That was nearly two years to the day after it became the first U.S. company to breach the $1 trillion mark.
Apple Boosts the Nasdaq
Apple's 2023 gains have also formed the key plank in the Nasdaq's current year-to-date gain of around 30%, the best first-half start to any year since 1983.
Its shares were last valued at just over $3 trillion in early January 2022, when the stock traded at $182.86, but more Apple shares were outstanding to boost its overall value.
Apple issued a negative net total of $89.402 billion in shares last year, a figure that incorporates its regular buybacks, and a net negative total issuance of $39.07 billion over the first three months of 2023.
The influence of so-called Big Tech stocks, which Bank of America has dubbed 'The Magnificent Seven," has been undeniable.
Apple, Microsoft (MSFT), Google (GOOGL), Meta (META), Amazon (AMZN), Tesla (TSLA) and Nvidia (NVDA) comprise around 9 percentage points of the S&P 500's year-to-date gain of around 14%.
These seven stocks also make up nearly a third (around 31%) of assets under management in its Global Wealth and Investment Management division, a 44% increase since the start of the year.
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