Apple (AAPL) stock has been moving on supply chain-related news that really should have come as no surprise. Indeed, it’s hard to steer clear of the COVID-induced global chip shortage these days, even for a company with a knack for dodging and weaving through such operational challenges.
At the same time, Apple is known to be quite conservative with its forecasts and targets. The recent iPhone product target cut may have been met with selling pressure initially, but the company has proven time and time again that it can surprise itself and investors.
For that reason, I remain bullish on AAPL stock and would continue to hold, as the name attempts to stage a bounce-back from its recent correction.
See AAPL Website Traffic on TipRanks >>
Apple’s iPhone 13 Production Cuts are No Big Deal
Undoubtedly, the holiday quarter would have been greater, had chip shortages not spread to the iPhone maker. The iPhone 13 would have been the ultimate Christmas gift for Apple fanatics. But as the shiny new device becomes hard to come by amid a potential production cut that could be in the millions, it seems as though many are just going to have to wait to get their hands on the “most Pro iPhone ever.”
Many iPhone users are long overdue for an upgrade. Aided by an economic reopening and easing of COVID restrictions, people are going to want to upgrade their hardware, such that they’ll be able to enjoy the speed that comes with a 5G network. While the iPhone 13 didn’t have jaw-dropping features like satellite connectivity or a complete lack of a notch, it is a meaningful upgrade.
Specifically, Apple’s A15 chip is several notches above the competition. A better battery and camera were also what fans wanted. And with the iPhone 13, Apple is answering the call of fans and at a modest price of admission, even amid rampant inflation.
Early signs show that demand is there and that the iPhone 13 could be a more desirable iteration than last year’s iPhone 12. But what good is strong demand if the supply isn’t there?
Orders are likely to continue flowing in, and patient Apple users will, in due time, receive their devices, even with a few months of delay. You see, the iPhone isn’t a product that will see demand wane considerably. Chip shortages are a global issue, and they’re not at all unique to Apple.
Given Apple’s loyal customer base and the incredible operational expertise of CEO Tim Cook, the chip shortage may ultimately work out in Apple’s favor at the end of the day, as top rivals are not immune to this global chip shortage, either. Moreover, increased scarcity of the iPhone 13 may boost the device’s desirability, leading to some very robust pent-up demand that could be met going into the new year.
TipRanks’ Website Traffic Tool
According to the TipRanks Website Traffic Tool, traffic to Apple’s website has risen 11.06%, compared to the same quarter last year. That is likely reflective of increased interest in the company’s products. At the same time, total visits on all devices are down 1.09% since last quarter.
Bottom Line on AAPL Stock
If any company can retain demand in the face of profound supply chain challenges, it’s Apple. The stock is an excellent pick-up, should recent production cut headlines act as an overhang into year-end.
Disclosure: Joey Frenette owned shares of Apple at the time of publication.
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