Shares of Apple (AAPL 2.11%), the world’s most valuable company, emerged last month. The stock rose earlier this month when the company reported fourth-quarter results, following the same trend S&P 500 for most of the rest of the month.
A weaker-than-expected inflation report in October pushed Apple shares higher mid-month as the iPhone maker relies on consumer spending on consumer discretionary items and consumers have more money to spend when inflation is lower.
The stock ended the month up 11%, according to S&P Global Market Intelligence. The chart below shows performance over the month.
Apple is benefiting from the upswing
The biggest news from Apple at the start of the month was its fourth quarter earnings report. The numbers showed solid numbers, beating estimates on sales and earnings, but the stock actually fell slightly on the news, falling 0.6% on Nov. 3 after posting two straight days of strong gains earlier in the month .
Apple reported record iPhone sales in the quarter, while total revenue fell 1% to $89.5 billion but came in ahead of expectations at $89.35 billion. At the bottom line, continued growth in the services segment helped boost margins, and earnings per share rose 13% to $1.46, above the consensus of $1.39.
Analyst reaction to the report was mixed, with a number of Wall Street watchers lowering their price targets on the stock to offset earlier declines in September and October.
There was no major news about Apple later in the month, but the stock benefited from cooling inflation and hopes of falling interest rates as the company is more sensitive to consumer spending than its big technology rivals.
Investors have continued to closely monitor the company’s performance in China and are eager to see how the new iPhone 15 and the highly anticipated Vision Pro mixed reality headset perform, set to launch early next year.
Can Apple continue to climb?
The stock continued to rise in early December and was nearing an all-time high. Shares are expensive at a price-to-earnings ratio of 31, but Apple has proven it deserves to trade at a premium even with flat sales. It has tremendous pricing power, and its services segment should continue to drive top and bottom line growth advance.
While the stock may be a bit overvalued at its current valuation, it still looks like a good long-term bet.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in Apple and recommends them. The Motley Fool has a disclosure policy.