Apple Inc. (AAPL) experienced soaring growth over the past fifteen months, outperforming the S&P 500 and rising by approximately 100.0% compared to the S&P’s gain of about 35.2%. Despite solid growth, many hedge funds and institutions sold the stock in the first quarter. So, Apple saw a slide in its rating on the WhaleWisdom Heatmap to 40 from 8.
Apple is a multinational technology company that designs, manufactures, develops, and sells personal computers, networking applications, portable music players, and mobile communication and media devices, including wearable technology (wearables) and touchscreen tablets. The tech company also offers various online services such as Mac App, a digital distribution platform for its applications, and iTunes, a media library and store. Despite the coronavirus pandemic that negatively impacted many businesses, Apple has thrived and shown record levels of growth. Pandemic-induced government stay-at-home orders had consumers reaching for their Macs, iPads, and iPhones, many purchasing more devices to meet the needs of remote learning, living, and work.
Hedge Funds Are Selling
Hedge funds appear to be trimming Apple from their portfolios. Looking at the first quarter of 2021, the aggregate 13F shares declined to approximately 1.4 billion from about 1.5 billion, decreasing approximately 6.7%. Of the hedge funds, 34 created new positions, 183 added to existing holdings, 38 exited, and 334 reduced their stakes. Aggregate holdings by institutions experienced a milder decrease of about 4.3% to approximately 9.4 billion from 9.8 billion.
Encouraging Estimates Continue through 2022
Analysts anticipate that earnings will rise over the next two years, bringing earnings to approximately $5.32 by September 2022. Revenue estimates are also favorable, with year-over-year predictions that could bring revenue to $355.5 billion by 2021 and $369.0 billion by 2022.
Analysts are bullish on the stock, as Apple has reached new heights in financial performance. J.P. Morgan Chase & Co. analyst Samik Chatterjee recently raised his price target on Apple’s shares to $175 from $170. Chatterjee cited strong outlooks for iPhone and Mac computer sales. From Citigroup, Inc., Jim Suva also shared a positive outlook as he raised quarterly earnings estimates.
Analysts share long-term optimism for Apple as the company continues to flourish, with shares hitting record highs in the past year. Apple worked through the challenges of the coronavirus pandemic and experienced growing demand for its products and services. Optimistic multi-year estimates offer patient investors motivation to acquire and hold onto shares.