Apple Inc. (NASDAQ:AAPL) Stock Will Outperform Other FAANG Stocks In 2020
Apple Inc. (NASDAQ: APPLE) has the “brightest” future of all technology giants, even if the novel coronavirus (COVID-19) pandemic has temporarily impacted the company’s business, Loup Ventures Managing Partner Gene Munster said in a note Sunday.
According to Munster, Apple will also outperform the rest of FAANG stocks, which include Facebook Inc., Amazon.com Inc. (NASDAQ: AMZN), Netflix Inc. (NASDAQ: NFLX), and Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG), in the financial year 2020.
“Apple is among the best-positioned major tech companies when we turn the corner,” the former research analyst said.
Munster noted that Apple has one of the strongest cash positions of all companies at $99 billion, second only to Google parent company Alphabet’s $117 billion, helping it weather through the pandemic.
In the long-term, the demand for its products and services is expected to increase based on pre-existing trends, the Loup Ventures co-founder predicted.
These trends include 5G-based device upgrades, increased share in subscription video on demand sector with the Apple TV+ service, continued penetration of software services, rise in health wearables, and augmented reality “emerging as the next major computing platform,” according to Munster.
“Apple investors should rest easy,” he said, forecasting a 12% revenue growth in the financial year 2021 at $277 billion, following a 5% slump this year.
The consumer electronics company’s GAAP earnings per share will rise 32% in FY21 at $15.12, compared to a 4% drop in FY20, Munster added.
Why It Matters
Apple downgraded its expectations for the second-quarter earnings of FY20 as the COVID-19 pandemic took hold in China, saying that both its supply chain and the demand for its products was severely impacted.
The coronavirus, which has since infected 1.8 million people worldwide, forced the company to close all its retail outlets outside of China indefinitely.
Other technology companies have been similarly impacted by the pandemic, but some, including Amazon and Microsoft Corporation (NASDAQ: MSFT), have seen a rise in their business due to the pandemic.
Apple shares closed 0.72% higher at $267.99 on Thursday.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 305.01.
The projected lower bound is: 228.72.
The projected closing price is: 266.86.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 78.8812. This is not an overbought or oversold reading. The last signal was a sell 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 52.57. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 28 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 125.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 12 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 10 period(s) ago.
Rex Takasugi – TD Profile
APPLE INC closed up 1.920 at 267.990. Volume was 8% below average (neutral) and Bollinger Bands were 11% wider than normal.
Open High Low Close Volume___
268.700 270.070 264.700 267.990 40,529,124
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 254.01 282.09 252.36
Volatility: 71 91 52
Volume: 44,423,676 54,181,516 34,079,552
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
APPLE INC is currently 6.2% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of AAPL.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AAPL.O and have had this outlook for the last 0 periods.