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Better-than-predicted results, and shifts from other tech stocks, lifts AAPL toward $600

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Investors seem to have taken heed of analyst ratings in response to the higher-than-predicted earnings Apple reported last week, the share price climbing from $524.75 before the company released its financials to approaching $600 at the time of writing.

Fortune suggests Apple’s results isn’t the only factor at play, with investors perhaps also following Greenlight Capital’s lead in moving out of other tech stock with particularly high price to earnings ratios – the measure of how a share price relates to its earnings. The higher the P/E ratio, the more over-valued it looks according to traditional measures … 

Comparing AAPL’s P/E ratio of 14.24 to Amazon’s 462.68 may be slightly unfair, given that Amazon has very deliberately chosen growth over profit, but the comparison with Facebook at 72.62 does illustrate one reason why tech investors may be headed toward AAPL.

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Comments

  1. Fabio Papa - 10 years ago

    Sure, all those things contribute to the rising share price, but the catalyst was the trio of announcements that 1) they are going to accelerate their buy-back program; 2) they are going to do a 7-to-1 stock split; and 3) they are going to increase the dividend.

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Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!


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