Apple Inc (NASDAQ: AAPL) Apple stock rose more than 9% on Monday which was the best day for it in 11 years. The company announced it will pay up approximately $500 million to settle lawsuit among American customers who said the company is intentionally slowing down older iPhone models. It closed on the aftermarket at the price of $298.99.
Even though the company denied all the allegations, it settled for paying $25 per iPhone to its consumers. Minimal total payout is $310 million. Payment will cover users of iPhone 6, 6 Plus, 6s, 6s Plus, 7, 7Plus or SE with the iOS 10.2.1 or later operating system. It also covers U.S. owners of the iPhone 7 and 7 Plus that have iOS 11.2 or later before December 21, 2017. Also, earlier today Oppenheimer Holdings upgraded the stock to an outperform rating and assigned a $320 target.
Oppenheimer analyst Andrew Uerkwitz wrote:
“We believe Apple products and services will prove more resilient than competitive products in uncertain times. Additionally, Apple’s strong balance sheet offers the company tremendous flexibility to keep the supply chain nimble as well as continuing to support its capital return plan.”
He added he believes that the coronavirus impacts will be short-term in nature and that sales will be only delayed. Not lost.
“Given the late stage smartphone adoption and Apple’s stronger resistance to competition, we expect temporary shifts of iPhone shipment between product cycles to have an immaterial impact on the stock.”
Apple Stock Is Still a ‘Trillionaire Club’ Company
Be it as it may, yesterday’s $24.45 per share gain contributed 172 points to the Dow Jones Industrial Average’s 1,296 point gain. Apple best day rally increased the company’s market value by $111 billion. This is still a little bit less than the one of IBM (NYSE: IBM). However, Apple’s market capitalization is $1.3 trillion.
The truth is, Apple stock was pretty much volatile ever since the company announced two weeks ago that it no longer expects to reach its previous March quarter revenue guidance of $63 billion to $67 billion, due to a combination of coronavirus-related supply chain and demand issues in China.
Apple Will Keep Repurchasing Its Shares
Last week, Apple Inc.’s CEO Tim Cook confirmed that the company will keep on repurchasing its shares and use the opportunity when their price is falling.
“It’s not the secret that we are buyers and not the sellers. I don’t want to go out publicly in the air but we will keep on repurchasing shares as long as they’re dropping. The more they’re dropping, the more we’ll buy it.”
Cook also said that there is a reason for optimism regarding the next quarter results. However, speaking of spreading coronavirus, he noted that this is a hard time but that Apple doesn’t look at China as a potential problem anymore. “We have great businesses and manufacturing in both South Korea and Italy. We have to see what will be happening there now.”
Meanwhile, co-founder of Apple Inc. Steve Wozniak revealed yesterday he or his wife may have been the COVID-19 “patient zero” in the United States.
The pair returned from China early in January with his wife experiencing a “bad cough” since. Wozniak noted that she is currently being tested for the virus at the West Coast Sports Institute in Santa Clara in California.