Apple didn’t report earnings, but it took a shellacking on growing speculation that this will be a disappointing quarter. Anxiety began on Friday; the bottom fell out when Morgan Stanley analyst Katy Huberty expressed concerns about iPhone sales.
Ironically, she only lowered her share price target on the stock to $200 from $203, and her new earnings estimate is in line with Wall Street’s current consensus. Moreover, she’s calling the stock a Buy.
Prior to price cut, weak numbers from Taiwan Semiconductor (TSM) sent shares of companies in the iPhone supply chain diving lower. It’s hard to invest based on anecdotal news associated with Apple (AAPL) and suppliers because there always seems to be stories of lower demand.
Also, a lot of semiconductor names with minimum Apple exposure took it on the chin, as well creating buying opportunities.
Any long-term holder of the stock has been through these periods of anxiety ahead of earnings releases, especially during the Tim Cook era. I’m holding the stock in my retirement portfolio. In many ways, it has been the most undervalued stock in the market for years.
By the way, there’s a great article in last week’s Barron’s about the Apple/Facebook feud that reminds investors that one company actually makes money the old-fashioned way of selling people products.
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