Apple (NASDAQ:AAPL) stock has registered an impressive recovery from the coronavirus pandemic sell-off in the past few months. On Monday, Apple shares closed at $315, which brought the year-to-date gains to 7.27%. Investors who took advantage of the stock’s pandemic lows in March have nearly a 50% return on their investment right now.
There could be a fresh rally in Apple stock. The company might expand in India to boost its handset and services sales.
Apple stock and India manufacturing
Apple has been manufacturing some iPhone models in India since 2017. In fact, Apple confirmed that it started producing iPhones in India three years ago. The company started with the production of its low-cost iPhone SE model. At the current price of $315 per share, Apple stock has more than doubled from its $150 price three years ago.
According to The Economic Times, Apple has been discussing a significant increase in its India manufacturing over the next several years. The report stated that Apple might shift 20% of its current manufacturing capacity in China to India.
The shift would allow Apple to take advantage of the manufacturing incentive that the Indian government is rolling out. The iPhones that are produced in India would be more competitive in the global market, which would widen Apple’s addressable services market. The benefits could make Apple stock more attractive.
The iPhone business contributes to most of Apple’s revenue. In the quarter ended in March, iPhone sales fell 6.5% year-over-year amid the coronavirus outbreak. Apple closed its retail stores around the world at the height of coronavirus infections, which impacted iPhone demand. However, iPhone sales contributed 50% of Apple’s revenue in the quarter. The stock has risen 7.5% since the company reported its March earnings results.
First Apple retail store in India
Amid Apple’s discussions to go big on India manufacturing, it also plans to open its first retail store in the country. Apple’s first store in India will likely open next year, according to CEO Tim Cook. Notably, Apple’s plans in India go beyond the iPhone. The company will sell its HomePod smart speakers at a discount in India in a bid to boost its sales.
At this point, Apple stock spots more than 20% upside potential to its highest Wall Street target price of $380.