The news for Apple Inc. (NASDAQ:AAPLB) has been good lately. Sales of the company’s iconic iPhone increased last quarter, buzz continues to grow regarding the upcoming iPhone 8 and thanks in part to a big buy from Warren Buffett, Apple shares have been on a tear.
Buffett, according to a recent filing, quadrupled his stake in Apple during the last 3 months of 2016. Investors have reacted by propelling prices to all-time highs.
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Market Value Rising
Over the past 3 months, Apple’s share price has gone up 26%. Currently Apple’s market value sits at about $700 billion. That’s more than $120 billion more than No. 2 Alphabet Inc. (NASDAQ:GOOGC). It’s also well above the combined value of Exxon Mobil Corp. (NYSE:XOMC) and JPMorgan Chase & Co. (NYSE:JPMC).
The only thing holding the company back from its record market value of $775 billion from February 2015 is the share-buyback program the company initiated in fiscal 2013.
The Smartphone Champ Returns
Apple also just reclaimed its position as best-selling smartphone, taking the spot over from rival Samsung. This follows 8 straight quarters at the No. 2 position for Apple. During Q4 2016 Apple sold 77.04 million smartphones besting Samsun’s 76.78 million according to research firm Gartner. The difference of 256,000 units wasn’t large but it was enough for bragging rights.
Apple now controls 17.9% of the worldwide smartphone market. Samsung owns 17.8%. Samsung was clearly hit by the company’s decision to discontinue the Galaxy Note 7 due to reports that some phones had defective batteries and caught fire.
iPhone 8 Buzz
More than anything else, investors have been encouraged by rumors and leaked info on the company’s next iPhone. It’s no secret that the iPhone drives Apple not the least due to the fact the device is on track to top $980 billion in sales since it came to market.
Speculation has been Apple’s next device will come in 3 sizes instead of the usual 2; that it will have a case made almost entirely of glass and that it could have wireless-charging capability. Add to that expectations of an OLED screen on at least one model and talk that prices will be higher possibly leading to better profit margins for the company.
Warren Buffet’s previously noted purchase of more than 40 million Apple shares increased his overall stake to 57.4 million shares overall. This make Buffett one of the top 10 biggest stakeholders in Apple.
Buffett, who tends to buy stocks for the long haul and who famously doesn’t gravitate to tech stocks, mostly because he says he doesn’t know the space that well, brings a strong attraction to investors unsure of where Apple may end up long term.
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On The Other Hand
With companies like Apple no matter how positive the buzz, there are always caveats. That $700 billion market cap is still about $70 billion less than where it was the last time Apple’s individual share price came close to $133 in 2015.
The company’s performance is worse than it was in 2015 with 16% lower net income and EPS down 9%. For those hungry for the elusive trillion-dollar market cap that goal is further away now than at several other times over the past few years.