What happened
Shares of Call (NASDAQ: AAPL) jumped more than 5% Friday to a new closing high of $ 497.48 on Friday, boosting tech stock’s post-earnings and pre-split gains.
So what
Apple’s market cap recently dropped a whopping $ 2 trillion, following its third-quarter blockbuster results. The tech giant’s revenue rose 11% year-on-year to $ 59.7 billion, while its earnings per share jumped 18%, to $ 2.58. Investors were pleased with the robust growth that Apple enjoyed in all of its key business segments, especially as it came during a global pandemic that devastated large parts of the economy.
Apple’s stock hit a record high on Friday. Image Source: Getty Images.
Many shareholders also celebrated the announcement of the stock split Apple. The company will split its shares 4-for-1 later this month to “make the stock more accessible to a wider investor base.”
Well what
It should be noted that stock splits do not change the fundamental value of a company. In many ways, a 4-for-1 stock split is like exchanging a $ 1 bill for four quarters. The amount of money is still the same after the exchange; it is simply divided into more parts. Still, many investors tend to get excited about stocks and their next purchase may temporarily increase the price of a stock.
More important to Apple’s fundamental value is an upcoming 5G-powered iPhone refresh cycle, which analysts believe could drive the share price even higher in the coming months. For one, Wedbush analyst Daniel Ives sees this as a “once in a decade” opportunity that could push Apple’s stock up to $ 600 a share in the year ahead.
