Apple Inc. (AAPL) Stock Downgraded To Neutral

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January 16, 2015 11:33am NYSE:VGT

apple inc.If the stock market graph for the past week was a picture of the movement of ocean waves, people riding in boats would be getting seasick. Apple Inc. (NASDAQ:AAPL) had a choppy week along with the rest of the market, with AAPL’s stock price


dropping on Monday, jumping up on Tuesday, and then dropping again on Thursday after an analyst downgrade. Still, when the dust cleared, AAPL beat the overall market for the four-and-a-half trading days from Friday, Jan. 9, through mid-day Thursday, Jan. 15. For that time period, AAPL fell 1.89 percent, while the Dow fell 3.06 percent and NASDAQ fell 2.81.

There was good news and bad news for Apple this week.

Apple May Challenge GoPro

First, some good news. Apple could be planning to make cameras that would compete with the remote-controlled wearable cameras made by GoPro (NASDAQ: GPRO). GoPro cameras have become hugely popular with people who engage in extreme sports, enabling them to take high-quality photos and video while in the middle of their activities.

This story started on Tuesday, when there was an announcement that Apple received approval for patents relating to camera systems that appear to be similar to GoPro’s and to improve on some of the GoPro camera’s weaknesses.

A patent approval doesn’t mean that Apple will actually produce the product, but the market reacted strongly to the news, sending GPRO into a 14 percent plunge in late trading on Tuesday.

Apple Downgraded to Neutral

And now some bad news. Mizuho Securities (NYSE: MFG) downgraded AAPL from Buy to Neutral on Thursday morning. The analyst believes that AAPL’s first-quarter results for this fiscal year will be “extremely solid” and that momentum is likely to continue through the second quarter, but that after that, there could be trouble. He thinks that the new iPhones will saturate the market by then, and it will be hard for Apple to attract new users. He is also not excited about the Apple Watch.

Despite this lukewarm prediction, the Mizuho analyst did maintain his $115 price target.

Expansion in China

Back to good news: Apple announced it will be opening five new stores in China before the Chinese New Year, which is a major gift-giving holiday there. With the new stores, there will be a total of 20 Apple stores in China. The company hopes to have 40 stores in the country within the next two years. CEO Tim Cook has said that it is just a “matter of time” before Apple’s revenues from sales in China grow larger than revenues from sales in the U.S.

Competition in China

While Apple has big plans for its business in China, Xiaomi, a Chinese smartphone maker, hopes to provide competition. This week it unveiled its new phone that looks very much like an iPhone Plus 6,

Vanguard Information Technology ETF — VGT

A good way to even out a bumpy stock-market ride is to invest in an ETF like VGT, which currently holds 427 different stocks, with AAPL as its largest holding.

By Diana Primavera, ETF Daily News


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