Apple continues on its mission to expand its services-based revenue and has recently announced new features with regards to Apple Podcasts and Apple Health. Holding a $2.21 trillion market capitalization makes AAPL still a leading tech company, even though the stock price has not continued to extend higher at the same rate as in 2020.
Alt-text: Apple Podcasts Subscriptions
Apple Podcasts Subscriptions
On April 20th, 2020, the company announced on its website “the next chapter of podcasting” with Apple Podcasts Subscriptions. Available in more than 170 countries, the premium subscriptions will include a variety of benefits curated by creators, including ad-free listening, exclusive access, and additional content. Tenderfoot TD, Pushkin Industries and QCODE are some of the premier studios, as well as leading entertainment brands like the Los Angeles Times and Sony Music Entertainment.
The COVID-19 pandemic generated an impressive demand for online content and as consumer behavior changed for the benefit of tech companies, brands like Apple kept providing new services for their clients.
WWDC provided new insights into Apple Health’s new features
During this year’s Apple Worldwide Developer Conference (WWDC) numerous announcements related to the Apple Health App had been revealed as well. The Sharing tab lets users privately share data with trusted partners, showing the company had embarked on a long-term journey to become synonymous with health-tech.
According to Dr. Sumbul Desai, Apple’s Vice President of Health, the new features associated with the Health App will come with the new iOS15. He reiterated that “privacy is fundamental for the design and development of our features, it’s a central tenet at Apple; users won’t have to sacrifice their own privacy to access their health data”.
Apple stock and the broad market
Despite new features announced by the company, Apple shares have been consolidating in a large triangle formation since January 2021. Buyers and sellers are now undecided since for the past few months the reopening narrative had been pushing flows towards cyclical stocks, not favoring the tech sector anymore.
Inflation and rising interest rates are expected to be a major tailwind for AAPL stocks, especially now when the P/E is close to 30. The same can be said about the broad market, which had become more unstable after the FED started to hit on tapering at its last meeting.
In terms of indices trading, the S&P 500, as well as the Nasdaq, continue to trade near all-time highs for the time being, but large tech stocks are no longer the heavy lifters.
Can the company continue to post solid revenue?
For several quarters in a row, AAPL stock had been rising on higher revenue as well as better forecasts for the near term. The market has now priced in very optimistic expectations, leaving valuations vulnerable to any miss. Fiscal stimulus, as well as monetary accommodation, won’t expand any further, and the tightening prospects might have an influence on spending. The corporate sector will thus need to refinance debt at higher interest rates and deal with lower revenue.