After a very tough first half of the year that saw hundreds of billions of dollars in market value go, Apple Inc. (NASDAQ:AAPL) is back in its familiar position as the market leader, and individual investors are a critical factor in the comeback.
The share price of the iPhone manufacturer has increased by 27% since mid-June, outperforming both the S&P 500 Index and the Nasdaq 100 Index. Apple (NASDAQ:AAPL) is now once again the most valuable firm in the world and is close to posting a profit for the year. Currently, Apple’s decline in 2022 is just 7.4%, vs. a decline of 20% for the Nasdaq 100.
After Apple’s quarterly earnings were better than anticipated, its shares enjoyed a relief rally. Their continued strength underscores Wall Street’s confidence in the company’s capacity to continue generating significant profits. Individual investors have rushed to the stock, helping to spark recent rises in speculative areas of the market.
Lucas Mantle on Apple
Data scientist Lucas Mantle, who works at Vanda Research, which monitors investor positioning, said that retail investors had been strong buyers of Apple (NASDAQ:AAPL) over the past couple of months, first attempting to buy the dip, then buying into the recent recovery.
According to data from Vanda Research, Apple (NASDAQ:AAPL) has consistently rated among the most bought stocks among that group over the previous month.
Apple’s profit forecasts have remained constant, while those for other mega cap companies and the technology industry more broadly have decreased. This is despite worries about a future recession in the US and dangers associated with supply chains in China. According to data published by Bloomberg, the average earnings-per-share forecast for Apple (NASDAQ:AAPL) for the upcoming year has decreased by less than 1% over the previous month, compared to declines of around 4% for Microsoft Corp. (NASDAQ:MSFT) and 7% for Amazon.com Inc. (NASDAQ:AMZN)
During the first three quarters of this fiscal year, Apple (NASDAQ:AAPL) returned more than $80 billion to shareholders as dividends and share repurchases, which is why mom-and-pop traders are undoubtedly drawn to the company due to its large cash flows.
However, getting a piece of that money geyser is not cheap. Compared to the 10-year average of 17 times, AAPL (NASDAQ:AAPL) is currently trading at a price that is 26 times predicted 12-month profits. The S&P 500 is valued at roughly 17.5 times profits, in contrast.
With a market value of $2.6 trillion, the tech giant (NASDAQ:AAPL) once more eclipsed Saudi Aramco to take the title of the largest company in the world in July. It is currently 14 % short of the $3 trillion valuation, which seemed like an impossibly distant goal only a few months ago.
Featured Image: Megapixl © Lester69
