Asset Watch
Thursday, March 7, 2024
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?