Apple iPhone (Shutterstock photo)
September 12 can’t come fast enough for Apple (AAPL) investors, who have watch Apple shares soar on Tuesday to all-time high close of $163.12, driven by a Wall Street Journal report stating the Cupertino-based tech giant would host a product launch event on Sept. 12 — presumably to unveil its highly-anticipated iPhone 8.
To be sure, an official launch date has not been issued by Apple. But investors, who are salivating at what analysts are calling a “Super Cycle” for Apple, are nonetheless celebrating the insight by the WSJ’s anonymous sources. Apple shares have solidified its ranking as the Dow’s top-performer, skyrocketing some 9% in August and are up more than 40% year to date.
In other words, this iPhone launch, which some analysts could fetch as much as $1,200 or even as much as $1,400, is expected to be more than just Apple’s typical incremental hardware upgrade. It assumes tons of future profits for Apple. And Apple, while issuing fourth quarter revenue guidance of $49 billion to $52 billion, which topped Street expectations for $49.1 billion, seems to agree.
As evidenced by its strong Q4 guidance, Apple continues to bet on itself and expects to maintain its high-operating momentum through the rest of the year. Wall Street responded with ratings upgrades, while increasing Apple’s price targets.
As an unabashed Apple fan, I’m on record for saying I would pay $1,000 (or more) for the new phone, which is expected to sport an OLED (organic light-emitting diode) curved screen — a feature that gives the device a larger screen size without increasing the phone’s physical size. Among other upgrades, the phone not only will have wireless charging capability, but also 3D sensing and VR/AR technology.
But will the the tenth-anniversary device be a huge letdown for Apple stock?
Amit Daryanani and Amitesh Bajad, analysts at RBC Capital aren’t worried. "From a near-term perspective, we would note historically AAPL stock has done rather well into product launches with median return 90 days prior to launch at 15.6% (median outperformance vs. S&P 500 at 10.9%). This, we think, sets up AAPL well heading into the product cycle this time around," the analysts wrote in a note to investors earlier this month.
What’s more, for those who fear the pricey phone might not sell well, Apple has an answer for that. In addition to the iPhone 8, the Journal reports that Apple will release refreshes to the iPhone 7s and iPhone 7s Plus, which were released in September of last year. Likewise, it is expected that AAPL will unveil a new Watch with its own wireless capabilities, meaning it does not need to be tethered to a phone.
All told, the buzz surrounding the Sept. 12 launch has re-energized sentiment in Apple. And to the extent the new phone can accelerate top- and bottom-line growth for Apple in the 18 to 24 months, Apple stock — despite its all-time high status — may yet be cheap.