Should you invest in Apple stock after predicting 5M iPhone pre-orders in China?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Sep 22, 2021
  • Apple said on Wednesday it expects at least five million iPhone pre-orders from China.
  • The company unveiled the iPhone 13 barely a week ago but says it sees initial high demand.
  • The AAPL stock surged slightly 1.25% after the report and trades at a reasonable P/E of 28.44.

On Wednesday, Apple Inc. (NASDAQ:AAPL) published a report saying that it expects five million iPhone pre-orders from China amid initial high demand for the iPhone 13.

The South China Morning Post said Wednesday there had been at least five million iPhone 13 orders in the eight days since the Technology giant unveiled the smartphone. The news outlet also said Chinese e-commerce platform (HKG:09618) accounted for at least three million iPhone 13 pre-orders. 

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 Apple shares surged slightly by 1.25% following the report for a year-to-date gain of 12.22%. As a result, the stock is now up nearly 30% over the last 12 months, meaning it is still underperforming the S&P 500 Index, which is up 32.66%.

The stock has also plunged more than 7% in the last two weeks amid rising China risk.

Why buy Apple shares now?

From an investment perspective, Apple’s recent share price decline of more than 7% has pushed its valuation multiple lower, making it an attractive investment opportunity for value investors. 

The stock now trades at a P/E ratio of 28.44 and a forward P/E of 25.08. Moreover, analysts expect the iPhone maker’s earnings per share to grow at an average annual rate of about 19.61% over the next five years.

Therefore, the stock could still be a compelling option for growth investors as it continues to create more avenues for generating service revenue. 

Source – TradingView

Apple shares seem poised for a rebound 

Technically, the AAPL stock appears to have recently bounced off the trendline support line, just above the 100-day moving average. Moreover, the stock also seems to have recovered to avoid falling to the oversold conditions of the 14-day RSI.

Therefore, with the company’s latest iPhone model gaining traction in China, this could catalyze a significant rebound. As a result, investors can target potential rebounds at $151.55 or higher at $156.92. 

On the other hand, if the stock price pulls back further, it could find support at $140.19 or lower at $134.95

Bottom line: now could be the time to buy AAPL shares

In summary, Apple shares seem to have recently pulled back to create an attractive opportunity for a rebound. In addition, the stock trades at relatively attractive valuation multiples whilst also offering exciting growth prospects. 

Therefore, the recent pullback could be an opportunity to add a quality technology stock to your portfolio.

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