Financial Advisors Put Apple Back on Pedestal as Q4 Results Eclipse Expectations - InvestingChannel

Financial Advisors Put Apple Back on Pedestal as Q4 Results Eclipse Expectations

The US stock market is continuing its ascend, as the S&P 500 and Dow Jones Industrial Average registered the seventh straight monthly gain in October and the Nasdaq Composite ended the month at a record high and posted the fourth straight monthly gain. According to Standard & Poor’s, the S&P 500’s 2.3% gain in October was mainly due to the Technology stocks, while five tech stocks, Facebook Inc (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT) contributed to 52% of the gains of the entire Index. Among these five stocks, Amazon, Facebook, Microsoft, and Alphabet posted stellar results in October. Apple released its quarterly results after the bell on November 2, being one of the main contributors to the gains posted by Nasdaq Composite and Dow Jones on the following day.

Between October 30 and November 3, the S&P 500 and the Dow Jones Industrial Average advanced by 0.26% and 0.45%, respectively, while the Nasdaq Composite jumped by 0.94%. The S&P 500 and Dow Jones Industrial Average posted their eighth straight weekly gain, while Nasdaq registered the sixth consecutive weekly gain. Among the major developments that affected the stock market’s performance last week was the release of the non-farm payroll data for October, which showed that the US economy added 261,000 jobs, lower than the expected 310,000. At the same time, the unemployment rate slid to 4.1%, versus expectations of 4.2%, which was seen as a signal of recovery in the labor market after hurricanes Irma and Harvey. Moreover, on Wednesday, the FOMC maintained the key interest rate at 1%-1.25%, with a hike now anticipated in December.

Meanwhile, Financial Advisors seem to be moving away from the third-quarter earnings season as it winds down, with more than 80% of the companies in the S&P 500 having reported their results by November 3. TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors, has compiled the list of 20 most searched tickers among financial advisors, which revealed only two companies that posted their results last week among the top 10: Apple Inc. (NASDAQ:AAPL), unsurprisingly landing on the first spot, and Priceline Group Inc (NASDAQ:PCLN), the seventh most-searched ticker. Another company that captured the attention of financial advisors last week included General Electric Company (NYSE:GE), whose ticker was the second most-searched among Financial Advisors as the stock continued to decline and closed below $20 on November 2 for the first time since 2012. QUALCOMM, Inc. (NASDAQ:QCOM) was on the third spot among most searched tickers as reports emerged on Friday that Broadcom Ltd (NASDAQ:AVGO) was going to make an offer to acquire it for $70 per share. QUALCOMM, Inc. (NASDAQ:QCOM)’s stock jumped by over 12% on the back of the reports, which have been confirmed earlier this week.

Having said that, let’s get a closer look at Apple Inc. (NASDAQ:AAPL), whose stock advanced by nearly 3% on Friday on the back of a quarterly report that by far exceeded Wall Street’s expectations. Moreover, Apple Inc. (NASDAQ:AAPL)’s stock advanced to a market cap of $868 billion, bringing it very close to a $1.0 trillion valuation in a race where the tech giant competes against Amazon.com, Inc. (NASDAQ:AMZN) and Alphabet Inc (NASDAQ:GOOGL).

For the fiscal fourth quarter, the iPhone maker posted adjusted EPS of $2.07, versus a consensus estimate of $1.87, while its revenue of $52.6 billion was better than the expected $50.70 billion. In addition, the company reported 46.7 million iPhones sold, compared to expectations of 46 million. The results were surprising particularly because in the couple of months preceding the earnings release, there was a lot of talk that sales of the new iPhone 8 and iPhone 8 Plus would disappoint because Apple Inc. (NASDAQ:AAPL) also announced the flagship iPhone X that was scheduled to hit the stores later and that would cause customers to wait for the iPhone X rather than buy the iPhone 8/8 Plus. However, the iPhone 8 and 8 Plus became instant hits and top-two selling products at launch, which was surprising even to the company, as Tim Cook pointed out during the earnings call.

Apple’s fourth-quarter report coincided with the day when the iPhone X hit the stores, with stores around the world reporting people standing in lines for days in order to be among the first to get the new phone. Given the strong the strong sales of the iPhone 8/8 Plus and the hype surrounding the iPhone X after it was announced, it’s likely that Apple will continue to make more money, especially as it enters the holiday season. For the current quarter, Apple Inc. (NASDAQ:AAPL) issued a revenue guidance of $84 billion to $87 billion, versus estimates of $84.9 billion.

In addition, the financial results revealed that Apple’s cash pile went up to $268.9 billion, from $261.5 billion a quarter earlier. Given their size, Apple’s cash holdings are always in investors’ spotlight and it might soon provide to be very useful. The new tax reform, which includes a lower corporate tax rate of 20%, also provides a way to repatriate overseas money at a one-time tax rate of 12% on cash returns and 5% on noncash. If Apple gets to bring back the money to the US it will represent a big deal for investors, since it is expected that a significant part of the money will be returned to shareholders.

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