Why Apple Stock Could Rise despite Slower iPhone Growth

Apple stock has declined due to trade war fears

Like most tech stocks, Apple (AAPL) has seen its stock decline over the last month or so. Investors have been rattled by the impact of the trade war on American tech stocks. The company’s ebbing iPhone sales growth has also pressured its stock. Apple stock has declined 5.2% since touching $194.00 on June 6.

However, several analysts remain bullish on Apple stock, as they expect the company’s Services segment to take over. The Services segment includes revenues from Apple Music, Apple Pay, and the App Store. This segment expects to include Apple’s streaming subscription service, which could be launched next year.

Why Apple Stock Could Rise despite Slower iPhone Growth

Apple’s subscription services could drive its growth

Citigroup is the latest firm to be bullish on Apple stock. Citigroup analyst Jim Suva expects Apple stock to breach the $200.00 mark next year. Apple’s paid subscriptions—which include Apple Music, AppleCare+, and iCloud—already have ~270.0 million subscribers.

In a note to clients, Suva noted that Apple’s pipeline of products launching in 2018 seems strong. Suva’s note suggests that India could be an upcoming market for iPhones. Currently, iPhone’s market share in India is insignificant. In his note, Suva opined that Apple stock is relatively cheap compared to the S&P 500 Index on a TTM (trailing-12-months) price-to-earnings basis.