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Why Deutsche Bank Isn’t Bullish on Apple, Says ‘Hold’

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Jun. 20 2019, Updated 2:59 p.m. ET

Apple

Today at 2:15 PM ET, Apple shares (AAPL) were hovering just below the psychologically key level of $200 at $199.50 with 0.8% gains for the day. After losing 12.8% in May due to escalating US-China trade tensions, Apple stock has risen 13.0% in June.

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Deutsche Bank initiates Apple coverage

Deutsche Bank initiated coverage of Apple today with a “hold” rating on the stock. According to a recent CNBC report, the bank appears to be positive on the company’s expanding services segment growth, but it believes Apple’s services “business increasingly faces a law of large numbers dynamic.”

Also, Deutsche Bank expressed concerns about a possible delay in 5G iPhones, commenting, “We fear a 2019 iPhone cycle lull ahead of 5G iPhones in 2020.”

WWDC 2019 event helped Apple stock

Earlier this month, from June 3 to 8, the iPhone maker held its annual WWDC (Worldwide Developers Conference) in California. During the event, the company announced iOS 13 for the iPhone and macOS Catalina—Apple’s desktop operating system—as well as many other products and software. These announcements helped Apple stock surge in the first week of June.

Over the last couple of days, broader-market optimism about US-China trade relations and expectations of a near-term trade deal have helped the stock sustain these gains.

QQQ ETF’s investment in Apple

Currently, Apple makes up about 10.3% of the Invesco QQQ Trust ETF’s total portfolio. The QQQ ETF has a stake of nearly $7.5 billion in Apple. On a year-to-date basis, Apple has risen 25.4% while the Invesco QQQ Trust ETF has registered 21.3% gains.

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