At $116, Apple stock may not be the same buying opportunity it was in late August when shares traded close to $100, but about $19 below its all-time high, and with shares trading at a meaningful discount to the S&P 500, the stock is still looking tasty. Indeed, some of the very concerns that may be keeping the stock suppressed are arguably overdone — specifically, worries about Apple’s waning growth potential for Apple’s iPhone business in China.
Enter Apple CEO Tim Cook: The one person who would know best about Apple’s struggles in China seems to be the most bullish on the company’s potential in the country.
During Apple’s September event, the CEO described iPhone sales around the globe as growing “by leaps and bounds.” China, specifically, is among its hottest markets, with iPhone sales in the country soaring 75%, year over year, during the last quarter, Cook said, noting this growth easily trumps a 4% decline in year-over-year sales for the rest of the industry’s performance in the country.
“But this data is from the second calendar quarter,” some critics may protest, “What about demand for iPhone in China today?” iPhone continues to be a blockbuster hit in China, according to the most recent data provided by Apple — data which was collected after China’s decision to devalue its currency.
“Growth in iPhone activations has actually accelerated over the past few weeks,” Cook said in a public letter to CNBC’s Mad Money TV host and investor Jim Cramer on August 24. The bullish note from Cook came just as Apple stock was trading around $103, and probably at a time when the company was spending billions of dollars repurchasing its own shares.
“I continue to believe that China represents an unprecedented opportunity over the long term,” Cook said later in the letter.
China may be up against some formidable headwinds. But Apple looks poised to continue charging hard amid these challenges.