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Trends & Analysis
News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

Asset Watch

Buy the Apple fire sale?

Thursday, March 7, 2024

It’s been a rotten 2024 for Apple, as the iPhone maker can’t seem to catch a break. The latest setback occurred on Mar. 5 after Counterpoint Research revealed that iPhone sales declined by 24% in China during the first six weeks of the year.
Apple “faced stiff competition at the high end from a resurgent Huawei,” said Senior Analyst Mengmeng Zhang. “Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now.”
While the bad news piles up, the weakness could be a buying opportunity for patient traders.

iPhone sales are Apple’s largest segment, accounting for nearly 60% of its Q1 revenue. Yet, services account for nearly 20% of its revenue (driven by advertising, video, and cloud services) and have greater growth potential. Services’ gross profit margin was also 72.8% in Q1 versus 39.4% for hardware products.

Add it all up, and the price action may not reflect the company’s long-term fundamentals, as seen last week when Apple’s 50-week moving average was a key support level and broke. And with the sell-off continuing Mar. 5, the 125-week MA (near $165) is up next. It provided long-term support in June 2019, March 2020, and June 2022. If it holds, the outlook is bullish.

So, is Apple healthier than it appears, or will more bumps and bruises form in the months ahead?


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