Shares of Apple rose over 4% after the company calmed Wall Street nerves with an improvement in sales in China, statements from brokerages predicting a boost in its services business, and the launch of new iPhones.
If the gains hold, Apple would be within touching distance of again topping $1 trillion (€897bn) in market value, just shy of the world’s most valuable company, Microsoft. Apple had 4.53bn shares outstanding at the end of last quarter.
In the earnings report, Apple said services revenue rose 12.6% to $11.5bn in the three months to June, offsetting a 12% fall in global iPhone sales. While the iPhone remains the biggest category, it now represents half of the firm’s sales at $26bn, down from $29.5bn the previous year.
Meanwhile, services — which includes the likes of Apple Music, iCloud, and Apple Pay — along with the Mac, iPad, wearables, and home and accessories, all experienced growth.
“We were especially pleased with the double-digit increase in services, driven by strong growth from the App Store in China,” said chief executive Tim Cook.
The sector looks set to take a bigger chunk of Apple’s growth in the future, with Apple TV+, the Apple Card, as well as a gaming subscription product, Apple Arcade, all set to launch soon.
JP Morgan analyst Samik Chatterjee, who rates the stock ‘overweight’, said he believed Apple’s transformation of the services business and a strong product cycle are solid reasons to own its shares.
- Reuters, PA