Apple (NASDAQ:AAPL) stock rose 8.72% on Monday and closed at $262.47. Notably, the increase marked the stock’s biggest single-day gain in about two weeks. Apple kicked off 2020 on a positive note and gained 5.4% in January. However, the company couldn’t maintain its early gains. The spreading coronavirus sparked a big sell-off in the stock. Apple stock fell about 12% in February and about 7.0% in March.
Investors dumped Apple shares amid a stream of bad news for the company. First, there were reports about falling monthly iPhone sales in China. Then, the COVID-19 outbreak forced the company to close its retail stores, initially in China, and then cut its revenue expectation.
There’s no doubt that Apple has taken a beating from the COVID-19 pandemic. However, there are three reasons why investors still like the stock.
Apple stock trades at a 25% discount
Notably, it isn’t every day that you find a high-quality technology stock trading at a double-digit discount. Apple is one of technology investors’ favorite stocks. Apple’s stock price of $262 at the closing on Monday means that it’s trading at a 25% discount to its 52-week peak of $328.
Cheap iPhone is coming soon
Apple is gearing up to launch a new budget iPhone soon. The company’s previous low-cost smartphones sold under the “iPhone SE” name. The new iPhone will be the iPhone SE 2 or iPhone 2. The previous iPhone SE sold for $400.
A budget iPhone might be the perfect product for a global market devastated by the COVID-19 pandemic. Businesses have shut down and people have lost their jobs due to the coronavirus. Right now, people who want to upgrade their phones might settle for a low-cost device rather than a high-end one. In fact, Apple has explored delaying the launch of its flagship iPhone this year due to fears that it might not attract strong demand amid the COVID-19 crisis.
Apple has used the low-cost iPhone SE to accommodate a broader customer base and boost iPhone sales. The stock tends to be sensitive to the health of the iPhone business since it contributes most of the revenue.
Apple will start reopening retail stores
Apple closed most of its retail stores last month. The company closed the stores to help prevent the spread of COVID-19. However, the company plans to start reopening the stores in April. Reopening stores should help lift some of the pressure on iPhone demand, which should bode well for Apple stock.