Apple’s Record Stock Buyback Spurs 7% Surge, Boosting Market Cap to $2.86 Trillion
Apple's shares surged by 7% on Friday, buoyed by the company's ambitious stock buyback program and optimistic sales projections.
This revitalized investor interest, which had waned due to concerns about weakening demand and heightened competition in China.
In a late Thursday announcement, Apple forecasted fiscal third-quarter sales that surpassed the modest expectations set by Wall Street. Additionally, it greenlit an additional $110 billion in share repurchases, marking the largest buyback authorization ever granted by a U.S. company, according to EPFR analyst Winston Chua.
Following Friday’s stock surge, Apple’s market capitalization swelled by nearly $200 billion to reach $2.86 trillion, positioning it as the second most valuable company, trailing only behind Microsoft, which boasts a $3 trillion valuation. At current stock prices, executing Apple’s entire buyback plan would involve reclaiming nearly 4% of the company’s shares.
Apple’s optimistic forecast indicates confidence in upcoming product updates, beginning with an iPad event slated for May 7. These updates are expected to reinvigorate demand in the hardware segment, which had experienced sluggish growth, prompting doubts among some investors regarding Apple’s status as a top-tier investment.
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Analysts like Josh Gilbert from investment platform eToro noted that CEO Tim Cook’s reassuring demeanor alleviated investor concerns. Apple’s decision to initiate a substantial buyback program aligns it with other leading U.S. tech firms, which have utilized such measures to mitigate apprehensions about increasing investments in generative AI and signal industry maturity.
CEO Tim Cook hinted at forthcoming developments, sparking anticipation among analysts that Apple may unveil AI integrations at its upcoming annual developer conference. Analysts from Bernstein anticipate a robust cycle for the iPhone 16, fueled by AI enhancements and prolonged replacement cycles.
Alexander Stefanov
Reporter at CoinsPress
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