On February 8, Apple stock (AAPL) – Get Apple Inc. Report climbed nearly 2% to finish the trading day valued at nearly $175. The daily performance was better than that of the S&P 500, which recovered late in the afternoon but ended the day up less than 1%.
Today, the Apple Maven looks at what could have pushed Apple stock price higher on Tuesday to, once again, put the company’s equity within striking distance of the $3 trillion market cap.
Figure 1: Why Apple Stock Shot Higher On Tuesday
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(Read more from the Apple Maven: Apple Stock: Why A Peloton Deal Would Not Make Sense)
What pushed AAPL higher
The only newsworthy, company-specific news of the day that could help to justify the outperformance in Apple shares was the acquisition of AI Music. This is a UK-based startup that develops technology to automate music curation through artificial intelligence.
Any revenues or earnings that the acquiree may produce is likely to be irrelevant for a company the size of Apple. But the tech giant is known for making many small bolt-on acquisitions, as many as one every three to four weeks on average, to help it develop its own products and services by bringing in IP (intellectual property, including employees) to the Cupertino campus.
The deal is a nod in the direction of further growth in Apple Music, possibly Fitness+ and HomePods. These are fairly small businesses for Apple, but some that could become more meaningful for the P&L a few years down the road.
Otherwise, it is likely that Apple stock just got a jolt from overall bullishness in the broad market. The tech-rich Nasdaq jumped by more than 1% on the day, helped by another post-earnings leg higher in Amazon (AMZN) and a nice spike in Tesla (TSLA) – Get Tesla Inc Report.
Apple stock continues to trade about 5% below all-time highs. Maybe dip-buyers continue to take advantage of the stock’s little traction in 2022 to accumulate shares.
What could happen next
Holiday quarter earnings season for tech companies is largely over. After Apple dropped the mic on fiscal Q1 results, I believe that renewed optimism for the stock is justified.
That said, there aren’t many catalysts in the horizon that could send Apple stock substantially higher or lower. The next might be the announcement of the new iPhone SE and iPad Air, expected to happen next month. I doubt that the event will be a game changer, but it can instill further confidence in shareholders.
Worth noting, Apple stock tends to produce its best few months of gains right around this time of the year. The chart below depicts return seasonality vs. the S&P 500. While February has historically been a bit weak for AAPL, March and April rank among some of the best months.
Figure 2: AAPL average monthly return vs. S&P 500 (seasonality)
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting the Apple Maven)
