Optimism About Apple as Year Ends

24/7 Wall St.

A share price that is up less than 10% is hardly a cause for celebration. However, after a very bad year, that is where Apple Inc.'s (AAPL) stock will end the year. It was, after all, down more than 25% from the start of the year in mid-year, when it appeared that the maker of the iPhone and iPad had dropped hopelessly behind Samsung in sales, and perhaps had lost its innovation edge.

After a period of deep pessimism, maybe it did not take very much to bring Apple's shares back by a modest amount. The largest catalyst was probably the anticipation that it can sell tens of millions of iPhones in China, if it can close a deal with the largest cellular carrier in the world -- China Mobile. But no one outside Apple or China Mobile knows the details of the likely partnership. The margins Apple makes on deals with most carriers may shrink because Apple needs China more than China needs Apple.

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Another reason for Apple's rise is that some on Wall Street think it has sold off too much. Susquehanna Financial Group recently raised its price target on Apple to $650 because it expected iPhone 5S sales to be better than most experts expect. BMO Capital Markets said Apple's shares will reach $585, although that is not very much above the current $549 price. Piper Jaffray made the odd decision to look at Twitter feeds to try to determine demand for the iPhone, and the research firm said the results were positive for Apple. According to Barron's, the research firm issued a note that said:

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Apple products that appear in the top 10 most requested gifts in our analysis include: the iPhone, iPad, Macbook, and iPod with .49%, .33%, .15%, and .09% of the Tweets respectively. This compares with Galaxy, Tablet, Samsung, and Android at .14%, .08%, .08%, and .03% respectively . We would also note that the list encapsulates items that consumers want if money were no object. Although this doesn’t directly measure sales, we view the data as a positive, knowing that consumers continue to look to Apple products as the most desirable holiday gift.

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As the year end, sentiment, which has been so tough, has turned in Apple's favor, if not enthusiastically, then at least better than earlier in the year.

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