Apple (AAPL) shares have found strong support recently and could continue to gain momentum, despite global headwinds.
AAPL – Weekly Chart
AAPL shares have found strong support at the $200 level and have clear room to move toward the $248.40 level if market sentiment remains positive.
Analysts have been concerned about Apple’s ability to grow when China’s economy remains under pressure. The negative sentiment has weighed on Apple’s stock this year, with its shares down 15.7% year-to-date, lagging behind the Nasdaq 100’s 6.5% gain.
Apple CEO Tim Cook acknowledged that, while tariffs had a “limited impact” in the March quarter, estimates predict a $900 million cost increase during the June quarter. That will be a key issue going into the Q2 earnings season.
Apple’s business is also under increasing pressure in the Chinese consumer market, where trends are favoring domestic brands. Government restrictions on iPhone use by state employees are another headwind.
China has accounted for nearly 20% of Apple’s revenue in recent years, and even minor disruptions can significantly impact the bottom line. Despite the recent headwinds, Apple delivered $95.4 billion in revenue in the recent quarter, up 5% year over year. The company also set new sales records in key markets, including the U.K., India, Brazil, and the Philippines.
Analysts have been concerned about the company’s reliance on China for manufacturing, but Cook noted that most iPhones sold in the U.S. this quarter were made in India. Vietnam now manufactures the majority of iPads, Macs, Watches, and AirPods for the U.S. consumer.
The company is also expanding further in India with plans for new retail stores and iPhone assembly locations.
The stock has the potential for further gains if it holds the $200 level, and focus will shift to Q2 earnings, due in the next few weeks.
