Apple Stock Flat Following Company's Big Investment Plans

The equity is falling back toward its year-to-date breakeven level

Deputy Editor
Apr 26, 2021 at 10:41 AM
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The shares of Apple Inc. (NASDAQ:AAPL) are flat this morning, down 0.1% at $134.20, after the technology behemoth announced it will invest more than $430 billion in the U.S. economy -- upping its original 2018 commitment of $350 billion -- while adding 20,000 new jobs over the next five years. In addition, Apple said it plans to open a new campus in North Carolina, specifically in the Raleigh area, and will spend over $1 billion to do so with plans to employ 3,000 people to work in areas such as software engineering and machine learning.

After hitting an all-time high of $145.09 on Jan. 25, the security steadily fell to notch an annual low of $116.21 by March 8. With help from the 180- and 10-day moving averages, the equity managed to carve out a channel of higher highs in early April but found pressure at the $136 level. Down 6% over the last three months, AAPL is sitting just a hair above its 2021 breakeven. 

Analysts are still overwhelmingly bullish toward Apple stock, with 23 of the 26 in coverage sporting a "buy" or better rating. Meanwhile, the 12-month consensus target price of $152.06 is a 13.1% premium to current levels.

This upbeat sentiment is reflected in the options pits, where calls are popular. AAPL sports a 10-day call/put volume ratio of 3.51 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the elevated 88th percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late. 

Lastly, investors looking to get in on Apple stock's next move may want to consider options. The security's Schaeffer's Volatility Index (SVI) of 30% sits in the 19th percentile of its annual range. In other words, option traders are pricing in relatively low volatility expectations at the moment. What's more, the equity's Schaeffer's Volatility Scorecard (SVS) ranks at 94 out of a possible 100, implying that AAPL has tended to exceed these volatility expectations in the past year -- a boon for option buyers. 

 

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