iPhone 14: “The worst kept secret”

Investors hoping the introduction of the iPhone 14 series will help Apple Inc. shares rebound from their January high might be disappointed if history is any guide.

The stock has dropped seven times on the day the company launched a model over the past decade. When the new iPhone is announced on Wednesday, Apple is expected to take shareholder-friendly measures, such as higher prices, to protect its margins from inflationary pressures, analysts said. Such moves, however, come during a weakening economy that can make buyers reluctant to pay more for a handset.

“Apple’s fall iPhone launch event has always been the ‘worst-kept secret,’ with investors being aware of most of the product lines to be announced ahead of the event,” said writes Samik Chatterjee, analyst at JPMorgan Chase & Co., in a note. . “Investors will be watching iPhone prices carefully amid an increasingly challenging macro with concerns over consumer spending.”

Historically, stocks tend to rebound a few months after the event as the first selling numbers come in. However, even that respite eluded the title after the last two iPhone announcements. Apple shares are down 13% this year, heading for their first annual decline since 2018.

Some analysts predict that Apple will raise the prices of its high-end Pro models that cater to more affluent customers while slashing older phones to appeal to budget-conscious buyers.

Wamsi Mohan, an analyst at Bank of America Corp., expects to see a 20-cent increase in earnings per share if Apple raises prices for its Pro models by $50.

The price increases are significant because Wall Street is counting on Apple’s earnings-per-share growth to outpace the revenue increase. Analysts expect profits to rise 9% in 2022 and 6% next year, compared with projections of annual sales increases of 7% this year and 5% next, according to data compiled by Bloomberg.

Apple is the best-performing mega-cap tech stock this year as investors trust its ability to tap into its more than 1 billion customers to earn more on its services, including app subscriptions, video , fitness and games.

The next catalyst for the stock will be September quarter earnings, which will be released in late October, said Gene Munster, managing partner of Loup Ventures.

“At that time, I expect Apple to reassure investors that while Apple is not immune to a downturn, their products will remain in demand and sales will increase by year to year in the December quarter,” he said.

Technical table of the day

It’s been a tough year for tech stocks and that’s reflected in the Nasdaq 100 index falling 26%. While the gauge is on course for its worst performance since 2008, it still outperforms another stock favorite. speculators, bitcoin. The cryptocurrency, which is down almost 60% for the year, was trading slightly at around $18,888 as it neared its 2022 low.

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Lawyers for Twitter Inc. are using Elon Musk’s text messages to try to convince a Delaware judge that the billionaire wants to drop his $44 billion deal to acquire the company because of buyer’s remorse, rather than s worry about spam or bot social network accounts. According to Senator Amy Klobuchar, the bill’s lead sponsor, an “incredible big money attack” on a landmark bill intended to limit the power of America’s biggest tech companies has been a roadblock to the legislation’s passage.

Six Gulf Arab states have called on streaming service company Netflix Inc. to stop broadcasting content they say violates the region’s Islamic values, and threatened legal action if it does not act.

South Korea’s Samsung Electronics Co. warns the semiconductor industry could face a difficult end by 2022. A senior executive at the world’s biggest memory chipmaker said the outlook for the second half of the year was bleak and that Samsung didn’t see any momentum yet. for a return next year.