Apple tries to regain market confidence

Financial markets/economy

Posted by MoneyController on 03.05.2024

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Apple also shows signs of a recovery attempt in the markets: from the less negative than expected results to the share buy-back plan.

Apple and the poor stock market results since the beginning of 2024

Since the beginning of this year, Apple's stock on the stock exchange has fallen by about 6.8 per cent; in contrast, the stock of historic rival Microsoft is up by more than 7 per cent. One of the reasons for this very different result is that Microsoft has shown itself to be up-to-date in the field of artificial intelligence, and this is mainly due to its investment in OpenAI (the company that developed and marketed ChatGPT). Apple, on the other hand, seemed to have fallen behind in a crucial area in driving the financial markets.

Lower-than-expected drop in sales in China

The Cupertino company, however, is trying to catch up. First, there are the better-than-expected sales results in China. As we read in ‘Market Watch’, in an article by Therese Poletti, sales fell by 8 per cent, but were above expectations: sales receipts amounted to USD 16.4 billion, against the USD 15.3 billion that financial market participants had expected. This allowed Apple to gain 2.2 per cent on the stock exchange.

The buyback and dividend increase

The second move planned by Apple to regain market appeal consists of a share buyback plan totalling $110 billion. Share buybacks are almost always appreciated by investors: provided they are sustainable in a company's balance sheet, buybacks lead to a reduction in the number of outstanding shares, so that the value of the remaining ones increases. In addition, the company has also planned a 4% increase in dividends to be distributed to shareholders.

An opportunity to present new AI-related projects?

However, the question of integrating artificial intelligence into Apple devices remains open. As Poletti writes, many investors, customers, and market observers are therefore waiting for the Worldwide Developer Conference to arrive in June: for many, it could be an opportunity to present new products tied in with artificial intelligence-based technologies.

Read also:

US markets and big tech, quarterly reports arrive: surprises from Google, Microsoft and Meta

Tesla is in crisis, but Elon Musk tries to win back market trust

Adidas soars on the stock market, OVS also does well, while Netflix stops despite positive results

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