Apple (AAPL) investors appear to have gotten over concerns about slowing growth and possible antitrust actions. Apple stock touched a buy point Wednesday after rebounding from a spring sell-off.
On the stock market today, Apple stock rose 0.5% to 136.96. Earlier in the session, it climbed as high as 137.41.
Apple stock hit a buy point of 137.17 out of a cup base, according to IBD MarketSmith charts. However, trading volume has been well below average, a warning sign that positive stock movements lack conviction.
Morgan Stanley analyst Katy Huberty says Apple stock faces several headwinds. They include slowing iPhone sales and concerns that the upcoming iPhone 13 handsets will underwhelm.
Antitrust Scrutiny Is An Overhang On Apple Stock
Plus, Apple along with other Big Tech firms are facing antitrust scrutiny in the U.S. and Europe.
“Apple is increasingly in the eyes of regulators, and while we believe their model is defensible, regulatory risk is likely to remain a stock overhang,” Huberty said in a note to clients last week.
Apple also faces difficult year-over-year comparisons as the economy reopens following the Covid-19 pandemic. The consumer electronics giant saw a surge in Mac computer and iPad tablet sales last year as the pandemic forced people to work from home and learn at home.
“We recognize these risks but have a more positive outlook,” Huberty said. “In the near-term, we believe the June quarter will be stronger than originally expected as iPhone and iPad builds are tracking ahead of our model.”
5G Wireless Adoption Still In Early Stages
The iPhone 13 won’t be like past S-cycle iPhones because 5G wireless adoption is still in the early stages, Huberty said.
“As consumers leave their homes to travel and return to the office, we’d argue the value of 5G devices increases, providing a compelling catalyst for upgrades even if other technology updates to the next iPhone are more modest,” she said.
Huberty rates Apple stock as overweight, or buy, with a price target of 162.
Apple’s cup base is part of a larger consolidation that began after Apple stock pulled back from a record high of 145.09 on Jan. 25.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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