Apple has moved from $385 to $465 (20% rise) in less than a month, and that too, after poor results. The buyback news has helped the sentiments, and it seems that people are no longer concerned with all the negativity in the fundamentals. The stock which was beaten down for lower growth / margins / lack of new products etc. is no longer being looked from those angles. The buyback will reduce the cash over the next few years, and if the revenues keep declining and profits keep falling, then analysts will start hating the buyback. Has Apple become a trading stock or is it a dividend stock? Maybe, it is no longer a growth stock, but even this assertion may not be true for a long time. However one looks at it, Apple has to deliver on the growth and the margins front. The only way it can maintain its pricing power is to bring out great products, and only pricing power can protect margins. Cost of production may not have too much scope to improve, and Apple does not compete on cost anyway. There was talk that the cheaper iPhone will come out in a few months (Morgan Stanley report). That is no guarantee of success. In new markets, far away, it may help. But, surely local players there can compete on costs better. It will not launch the lower priced product in US because it may lead to dilution /cannibalization etc. Then there is the overhang of the patent infringement lawsuits which are only increasing. Market is full of news on this. While Apple is contesting VirnetX (VHC)'s $368 million claim, MGT Capital Investment (MGT) is expecting a settlement offer from WMS Industries (WMS) in the $4.5 billion lawsuit. So the negatives remain, there is no concrete development on innovation and the stock is moving up. The movement during the past year indicates the way markets sometimes operate (whimsically?).