Will the Apple stock continue to rise and reach $400 in 2020?

  •   31/01/2020 - 10h18
  •   Adeline HARMANT

While Apple's share price seemed to be heading towards a strong recession a year ago with forecasts of weak iPhone sales and fears of the Chinese economic slowdown, investors were surprised to see one of the strongest increases in the company's history in a year. But can the price of this stock still rise and can the Apple share reach the $400 level? Let's find out the answer to this question together.

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Will the Apple stock continue to rise and reach $400 in 2020?
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A year 2019 more than beneficial for the Apple share :

First of all, let's look back at the evolution of this share price over the past year. In fact, the share price almost doubled in 2019 and the company's value reached $725 billion.

This increase is mainly due to the expected recovery in iPhone sales.

The beginning of the year 2020 was also interesting for Apple which announced the upcoming release of its first 5G devices and analysts have thus predicted for the first time in several years a growth in iPhone sales of the group.

Outside of iPhones, Apple's business has also experienced interesting growth and the stock has traded at nearly 27 times earnings per share in its last fiscal year.

 

Mixed reactions from investors and shareholders following this bullish rally :

After Apple's strong gain in points in 2019 and early 2020, investors' and shareholders' reactions are mixed, however.e as some believe that the company has benefited from a wave of enthusiasm and may see this fad fade quickly after the release of the next iPhone. They are therefore strategically selling off their assets.

But at the same time, other investors are strengthening their positions and betting on the development of the firm's service activities in the apple sector, which offer higher margins.

 

How the Apple stock may evolve in the medium term :

Over the next few months, Apple's share price is expected to experience significant volatility due to some market uncertainty as to the group's categorisation as a service company or as a company specialising in computer hardware.

Since last fall, the share price has continued to climb against the backdrop of expectations of strong sales of the next iPhone 5G. Indeed, we have seen valuations and gains reminiscent of the performances recorded by the group in 2017 and at the time of the iPhone's release on the company's 10th anniversary. The share price had gained more than 70% of its value in one year and market capitalization had risen by $300 billion. It was just after the release of this aircraft that the rise took place and before a drop in the price of these shares in 2018 due to concerns about weak sales ofiPhone that the release of the following models has accentuated since they did not meet the same success as the previous one.

It is therefore likely that the group will experience the same setbacks and a slowdown in its sales with a correction in its share price on the stock market after the release of the iPhone 5G, which should not happen before 2021, since analysts believe that it is by this date that the network will keep its promises.

We will therefore follow with interest the iPhone sales force in the coming months because although Apple has already proven that it can increase its sales in other activitiess are services, investors know that the group needs a strong mobile telephony business to maintain a user base to which to sell related services and accessories. All of these elements are indeed important and will therefore have to be monitored very closely in order to know how this title will behave in the coming months.