Why Apple May Let Investors Down This Fall
As expectations for the latest iPhone release continue to grow, be wary of jumping into Apple now.
Ever since the release of the first iPhone revolutionized the cell phones in 2007, subsequent versions have each been met with huge fanfare – not to mention a ton of buyers.
Since 2007, annual iPhone sales have grown from 1.3 million to more than 195 million in 2020.
That figure topped 2019 sales by roughly 10 million, despite a year in which the pandemic derailed world economies.
The release of a new line of iPhones has historically been a positive for Apple, Inc. (AAPL) stock. From 2007 to 2019, nine out of the 13 new iPhone launches have seen AAPL trading higher 60 days after.
With the newest iPhone expected to be launched this September, traders are eying even more profit opportunities.
And the latest news from Apple suggest that this could be one of the biggest launches yet.
But before you go buying up shares of AAPL, there’s something you need to be aware of. It may just save you from losing a lot of money.
Where’s the money?
The release of a new iPhone has always been a huge event for Apple customers. And we’re getting an indication that this year’s launch could be met with some of the highest demand yet.
According to new reports, Apple has increased the production target for its upcoming iPhone 13 series release.
Apple has allegedly tasked its suppliers with building as many as 90 million new iPhones before the end of the year. To give some perspective, in recent years in Apple has ordered roughly 75 million units in preparation for a new iPhone launch.
Apple stock has been on fire since the news of increased production broke, gaining more than 4.1% from the lows on Tuesday.
As the anticipation builds for the not only the new iPhone, but 5G capabilities, new advances to the Apple Watch, and more, there are a lot of investors buying up this stock right now.
But I’m recommending that you don’t join them – at least not yet.
How do I get some?
Apple stock has been on on a rocket ride lately and is hitting new all-time highs.
But if you haven’t already gotten in on it, I think the ship has sailed.
For now, anyway.
Despite the hype around the new iPhone, there’s a historical trend that you need to be aware of. While AAPL does rise in the long-term after the launch of a new iPhone, the days immediately following a launch can be disappointing for investors.
More often than not, AAPL stock has been flat or down in the days following the release before buying picks up.
With an RSI well above 80, I think that AAPL is firmly in overbought territory and will need to sell off before it finds new buyers.
As such, I wouldn’t recommend making any short-term options plays around the iPhone 13 launch that rely on a quick pop.
My favorite way to play the new iPhone launch is a pick and shovel stock. I like Vuzix Corporation (VUZI) in the space because they make some of the parts for AAPL. With the number of orders of iPhones spiking dramatically, it should give VUZI a solid revenue boost.
Also, VUZI stock has sold off from recent highs, making now a great time to buy discounted shares.
Apple isn’t the only stock to be wary of
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In the Spotlight: Facebook follows Amazon’s playbook
Big tech has been under a lot of antitrust scrutiny lately.
But these companies aren’t taking the heat laying down. And while they’re not necessarily collaborating with one another in their efforts, they are learning from one another about how to fight back
Weeks after Amazon filed a motion to have the head of the Federal Trade Commission – Lina Khan – recused from its case, Facebook has followed suit and asked for the same.
Facebook is arguing that Khan cannot be impartial in its case with her history of repeatedly accusing the company of antitrust violations.
Khan has led an aggressive charge to curb what she sees as anti-competitive practices not only in big tech, but across the entire corporate world.
While it remains to be seen whether a recusal of Khan will happen for either Amazon or Facebook, both companies are hoping that achieving it will ease the investigations and potential penalties coming from the FTC.
As always, I’ll be sure to keep you updated here at Profit Pregame as we learn more.