Apple (NASDAQ:AAPL) stock continues to recover from the COVID-19 sell-off. On Tuesday, Apple shares rose more than 5.0% to mark one of their best days in April. The shares ended the day at $287. Now, Apple has risen 13% in April. Notably, the shares fell about 7.0% in March and 12% in February.
Apple stock jumps, China iPhone sales rebound
Apple stock rose on Tuesday after data from China showed a significant rebound in iPhone sales in the country. According to Reuters, citing Chinese government data, Apple shipped about 2.5 million iPhones in China in March. The amount represents a fivefold increase from February when the company sold roughly 500,000 iPhones in China.
China is the world’s largest smartphone market and an important market for Apple. In fiscal 2019, the company derived about 17% of its total revenue from China. Weakness in the Chinese market could weigh heavily on Apple’s overall financial performance. As a result, the stock fell after a report that iPhone sales in China dropped more than 60% in February.
The iPhone is Apple’s main revenue source. In the December quarter, the iPhone business contributed 61% of Apple’s total revenue. In February, Apple lowered its revenue expectations on iPhone supply and demand challenges due to the COVID-19 pandemic. Apple stock fell due to the revenue warning.
Cheap iPhone on the way
Apple will likely unveil a low-cost iPhone as early as this week. Investors hope that a budget iPhone will be a good fit for the pandemic-hit market and help boost Apple’s financial results this year.
Notably, the cheap iPhone would arrive just as China returns to work following months of lockdown and the US debates reopening the economy, which could boost the demand for the product. In addition to the budget device, Apple might introduce two flagship iPhone models, including a 5G device.
There were doubts about Apple’s 2020 iPhone launch plan due to the COVID-19 pandemic. The pandemic threatened iPhone manufacturing and demand because of lockdowns and a loss of income for businesses and households. Specifically, Apple was concerned about tepid demand for its flagship 2020 iPhone. However, the pressure seems to be easing. China continues to resume business and more countries might reopen their economies.
The rally on Tuesday slashed the discount in Apple stock that formed following the COVID-19 sell-off in February and March. Right now, you can still scoop up Apple shares at a 12% discount to their 52-week peak of $328.