Is Apple Inc. (AAPL) Going to $400 or $500 First?

Page 1 of 2

While Apple Inc. (NASDAQ:AAPL)’s calamitous plunge from more than $700 a share and the loss of its title as the largest company on earth may be the ultimate cautionary tale about flying too high, you must ask yourself where the stock is going from here. The company has been unfairly penalized for a slew of essentially arbitrary “problems” — like selling a mere 47.8 million iPhones last quarter — but there are some real concerns on the horizon, both company-specific and systematic to the market. Ultimately, I remain bullish on Apple Inc. (NASDAQ:AAPL) over the medium and longer term, but I think the stock is headed for $400 before it reverses and heads higher.

Apple Inc. (NASDAQ:AAPL)Positive catalysts
With the rollout of the BlackBerry 10 OS and the new Z10 smartphone from Research In Motion Limited (NASDAQ:RIMM) (know known as BlackBerry), Apple Inc. (NASDAQ:AAPL) investors can cross any immediate threat to the company’s U.S. sales off the list of concerns. The Z10, which did get some favorable reviews, will not be released for sale in the U.S. until March. While it is doubtful that the struggling BlackBerry will be able to make a meaningful dent in Apple’s numbers, as the earnings release showed, a few million units can matter; the 47.8 million iPhones referenced above fell short of the 50 million that many were hoping for from Apple Inc. (NASDAQ:AAPL). Remember, since we are talking about the immediate path of the stock, the competitive forces that play out in the next month are critical.

Additionally, Apple just announced that it is releasing a 128 GB iPad to meet some of the storage concerns of business users. The larger capacity is specifically targeted at users that have large memory requirements, and it’s a positive for Apple because it can capture a stronger margin while remaining competitive. The device is set to be released just days before Microsoft Corporation (NASDAQ:MSFT) releases the new Surface Pro tablet on Feb. 9. The fact that Apple Inc. (NASDAQ:AAPL) is signaling the importance of enterprise users is a positive.

Negative catalysts
The flip side of the large capacity iPad announcement coin is the fact that the Surface Pro is set to be released. While I think that the device has the potential to be a disruptive force over the long term, any type of positive reception has the potential to hit Apple Inc. (NASDAQ:AAPL)shares hard. The market has been overlooking positive news for the company and hammering it on bad-to-neutral news. If the Surface Pro has a successful kickoff, particularly in the press and blogosphere, investors may take the stock down, even if the move is only temporary and even if it is only to send a message.

The way Apple has been reacting to news lately, it feels like anything short of negative reviews of the Microsoft device threatens the immediate path of Apple shares. Given my positive outlook on the new Surface Pro and its ability to change the entire mobile computing landscape, I see it acting as a real negative catalyst.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!