Why Apple shares rose 18.9% in July

What happened

July shone apple (AAPL -0.14%) as its shares rose 18.9% during the month, according to data from S&P Global Market Intelligence.

Shares rose as investors awaited a positive third-quarter earnings report and its streaming service, Apple TV+, took off amid awards season.

And what

Ahead of Apple’s Q3 2022 earnings report, three senior analysts gave the stock positive recommendations. In the second week of July, KeyBanc’s John Vinh gave the equivalent of a buy recommendation, although he lowered his price target.

On July 8, bank of americaWamsi Mohan endorsed the stock, saying, “We’re getting a lot of data points that support a pretty decent quarter for Apple.” CowenKrish Sankar then reiterated his sentiments, agreeing that the company’s earnings would likely meet expectations.

Bullish investors were rewarded on July 29 when Apple reported that its net sales grew 2% in the third quarter, an increase of $83 billion. The company enjoyed a positive quarter, although inflation soared and led many consumers to cut back on spending, and supply constraints led to component shortages.

Apple’s iPhone appeared to be thriving in a less-than-ideal quarter, with sales rising 3% to $40.7 billion. However, the company’s other products were not so lucky. Mac sales fell 10% to $7.4 billion, while iPad sales fell 2% to $7.2 billion.

The company’s services business continued to flourish, growing 12% to $19.6 billion, with paid subscriptions surpassing $860 million. The Apple TV+ streaming platform performed well in July, earning 52 Emmy nominations. Apple series Ted Lasso increased its success with 20 nominations, while newcomer Severance had 14 nominations.

Now that

During a conference call with analysts in July, CEO Tim Cook said, “451 Research’s latest US consumer survey indicates that iPhone customer satisfaction is at 98%.”

Cook added: “We also attracted a record number of switches for the June quarter, with strong double-digit year-on-year growth.” Like clockwork, Apple tends to stick to a September release schedule with new iPhones. Such positive iPhone sales in a quarter without this launch could bode well for a favorable fourth quarter.

While Cook hasn’t forecast fourth-quarter earnings, the CEO said in an interview with CNBC, “We expect revenue to accelerate in the September quarter despite seeing some pockets of softness.” Investors will want to watch the likely release of Apple’s iPhone 14 in September and consumer reaction to the smartphone updates to better gauge the company’s performance in its fiscal fourth quarter.

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Danny Cook has no position in any of the aforementioned stocks. The Motley Fool has positions and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 Apple calls and short March 2023 $130 Apple calls. The Motley Fool has a disclosure policy.


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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!