Apple Stock Prediction: Apple Will Continue Proving The Bears Wrong

namanNaman Shukla is an Analyst at I Know First. He writes and invests in the stock market. Ranked in the top 8 percentile in Featured on,, among others.

Apple Stock Prediction: Apple Will Continue Proving The Bears Wrong


  • Against all hopes, Apple reported a great quarter.
  • The success of the iPhone SE should continue benefiting Apple.
  • Investors can expect the iPhone 7 to be packed with many new features.
  • Due to the increasing diversification, Apple still looks like a good buy.
  • I Know First maintains a bullish stance on AAPL.

Apple Stock Prediction

Source: Google Finance

I have been bullish on Apple (AAPL) over the last few months. I have recommended buying Apple on the pullback several times and the company has finally delivered. After reporting several weak quarters over the last one year, Apple finally delivered a stellar quarter this time around.

In the most recent quarter, Apple shared revenue of $42.4 billion, which was ahead of the analysts’ estimates, along with gross margin of 38 percent. The company accomplished these figures by decreasing its channel inventory by about $3.6 billion, considerably more than the $2 billion inventory decline Apple had earlier projected.

Despite surpassing the quarter’s estimates, sales understandably declined 14.5 percent year over year. The company shipped 40.3 million iPhone units versus 40.02 million projected and 9.95 million units of the iPad as compared to the estimated 9.1 million.

iPhone SE was a Huge Success

Surpassing shipments estimates of both the iPhone and the iPad certainly helped Apple perform well in the last quarter. However, it was the iPhone SE that proved to be the standout performer for Apple.

Apple Stock Prediction

Apple reported that it had a prosperous worldwide launch of iPhone SE, with demand exceeding supply all the way through the quarter. Apple’s initial sales signifies that the iPhone SE is famous in both developed as well as emerging markets, and the amount of iPhone SE sales going to consumers who bought iPhone for the first time is greater than the company’s management had seen during the starting weeks of  the launch of other iPhones.
Smartphone industry has almost peaked and is ready to evolve. The smartphone market is maturing, and this is the reason why stockholders should not anticipate identical type of performance that Apple produced throughout the initial growth phase. On the other hand, this does not essentially mean that sales will keep falling in the imminent years.

Apple launched the iPhone SE in 4 months ago, and, as stated above, demand for iPhone SE is exceeding management outlooks. As a result Apple is surging capacity to meet the consumers’ requirement in the approaching months. Given the strong demand, a surge in production will definitely boost the sales of the iPhone SE, eventually adding to Apple’s top and bottom-line.

In addition, Apple is one of the most powerful and well renowned brands around the globe, and customers are eminently loyal to the company’s ecosystem of products and services delivered by it. Majority of iPhone users desire to buy a new iPhone when renewing their smartphones.

The iPhone SE is comparatively cheap as compared to iPhone 6/6 Plus and iPhone 6S/6S Plus models, and comprise of 4-inch display. Due to this, iPhone SE is appealing huge first time purchasers and this definitely superb news for stockholders.

Samsung is a tough competitor

Samsung is Apple’s foremost competitor, and has performed well in the recent years. Samsung has launched some amazing smartphones including Galaxy S6/S6 Edge. However, Samsung recently launched its new flagship Galaxy S7/S7 Edge that outperformed the smartphone market. Galaxy S7 consist high tech camera that can efficiently capture pictures in low-light. The enhanced quality of Galaxy S7’s camera is a bad news for Apple because iPhones are mainly popular for their camera quality.

Apart from this, Samsung is on its way to launch its new Note 7 smartphone that will directly compete with Apple’s upcoming iPhone 7. Samsung skipped its Note 6 model to make a match with Galaxy S7 series. Note 7 will also comprise Edge features along with larger and wider screen size.

Apple Stock Prediction

However, Apple is also on its way to launch its new iPhone 7, and according to a report from Bloomberg, the company has eliminated headphone jack from the iPhone 7. This clearly suggests that consumers will have to use Bluetooth connections for audio. While it is still unknown what all new features Apple will add to the iPhone 7, I am confident that Apple will greatly improve the product following the success of Samsung and the bad year that Apple itself had.

As an outcome of the headphone-less phones, Apple could be the foremost winner of the shift from wired to wireless headphones as it is also the owner of Bluetooth market leader Beats. The company’s decision of removing headphone jack from iPhone 7 will also create a lot of opportunities for numerous companies such as Skullcandy.

Rest assured, Apple will definitely improve the next iPhone by a large margin. After the underperformance of the iPhone 6S and the success of Samsung’s Galaxy S7, Apple is unlikely to sit back and let its rival snatch market share.


While many bears were expecting Apple’s quarter to be its worst in a long time, the company has managed to prove the bears wrong once again. Since I published the article Ignore The Bears And Buy Apple On The Pullback on June 30, Apple’s stock has risen 15%. The company has already managed to reduce its dependence on the flagship iPhone by launching the iPhone SE which has been very successful and investors and expect more diversification going forward.

Apple’s stock will be dictated by the performance of the iPhone 7, and due to the reasons mentioned above, I expect the iPhone 7 to be a success, which is why I am bullish on Apple going forward.

As you can see from the image below, my bullish stance on AAPL is resonated by I Know First’s algorithmic signals.

Apple Stock Prediction