Apple releases great-than-expected sales numbers for its latest iPhones. Is there more room on the upside for the stock?
Let’s repeat that: Wow!
That was pretty much everyone’s reaction today as Apple released its weekend sales numbers for the iPhones 5s and 5c.
This past weekend, the Cupertino-based tech giant sold 9 million units of its brand new iPhone 5s and its less-expensive 5c model. Apple’s reluctance to mention pre-order sales last week had some worried that sales would be disappointing, especially when carriers were reporting that pre-orders were “not overwhelming”.
Many analysts expected Apple to meet or surpass that number, with 7.75 million units being the highest estimate. One well-known analyst, Gene Munster of Piper Jaffray, had thought supply issues would cause sales to only equal last year’s iPhone 5’s then-record debut weekend of 5 million units. Apple exceeded all expectations.
As well, Apple’s new mobile operations system, iOS 7, was downloaded more than 200 million times. This was the first major software designed by the company’s lead designer, Sir Jonathan “Jony” Ive. With enhanced security features, even the New York Police Department reportedly distributed exclamatory-laden fliers asking Apple users to download the new iOS to bring “added security to your devices”.
These two big stories also helped Apple guide its upcoming quarter’s revenue numbers toward the upper bounds of its previous guidance. The company now says revenues would be towards to higher end of the $34 billion to $37 billion range while gross margins would be on the upper ends of the 36% to 37% range.
Apple shares popped today towards $495 on the news but have since come off a bit. But, is it a $700 stock as Carl Icahn said last month or has Apple run out of ammunition?
Analyzing what’s next for the Apple based on its fundamentals is John Stephenson, portfolio manager at First Asset Investment Management. On the charts is CNBC contributor Andy Busch author and publisher of the Busch Update.
To hear what Stephenson and Busch have to say about whether Apple is a buy with today’s news, watch the video above.
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