Apple shares back in vogue as Wall Street bets on iPhone surge

Fri Jan 27, 2017 11:16am EST
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By Noel Randewich

SAN FRANCISCO (Reuters) - Wall Street has regained an appetite for Apple as investors bet that the release of a 10th-anniversary iPhone and pent up customer demand will shore up shrinking sales.

The largest component of the S&P 500, Apple remained a core holding of Wall Street throughout a decline in the stock in the first half of last year. But a recent rebound and speculation about an expected new phone have kindled additional investor interest.

Apple's 15-percent rally since mid-November pushed the stock to levels not seen in more than a year and boosted over 100 mutual funds that became shareholders in recent quarters.

The gains have come even as Apple struggles with slow global demand for smartphones, made worse by consumers in key growth regions like China and India preferring Android devices selling for under $200.

The stock is up 36 percent from lows in May of last year, when it was plagued by worries about iPhone sales, which fell in 2016 for the first time. The shares are now down 8 percent from a record high close in February 2015.

Many on Wall Street expect Apple, which reports its fiscal first-quarter results on Tuesday, to mark the 10th anniversary of the iPhone this year with a dramatically improved model.

Apple has not disclosed details, but analysts have speculated about potential new features including better haptic technology, wireless charging and a curved display that many believe will attract consumers who have begun to lose interest in smartphones.

"We think this is going to be a pretty solid launch, a really big one," said Brian Hennessey, portfolio manager of the Alpine Dynamic Dividend Fund, whose largest holding is Apple. "I think even the bears would probably suggest that this product that's coming out is going to be pretty interesting and hard to ignore."   Continued...

FILE PHOTO - The new iPhone 7 smartphone goes on sale inside an Apple Inc. store in Los Angeles, California, U.S., September 16, 2016. REUTERS/Lucy Nicholson/File Photo