Lately, investors have flocked back to Apple (NASDAQ:AAPL) stock, which resulted in a remarkable comeback from the pandemic sell-off. At $313 per share, the stock has risen nearly 50% from its pandemic lows and 13% over the past month.
Notably, the pandemic sell-off in February and March created a rare discount opportunity in Apple shares, which attracted bargain hunters. Apple hitting its services revenue target this year could make the stock more attractive.
Investing in Apple stock and the iPhone influence
For a long time, Apple stock has tracked the performance of the company’s iPhone business. In fact, the sell-off in Apple shares in February and March stemmed from investors fearing the worst for the smartphone business amid COVID-19. In February, Apple issued a revenue warning citing the pandemic’s impact on iPhone sales.
The company closed its retail stores in March. Investors were concerned that closing stores would impact the iPhone demand and sales. Notably, Apple reported a drop in iPhone revenue for the quarter ended in March.
The iPhone business contributes to most of Apple’s revenue. As a result, the performance of the smartphone business influences investors’ perception of Apple stock.
Sony movie deal seeks to bolster services business
The coronavirus pandemic just made a bad situation worse for Apple. The iPhone business already faced pressure from Huawei and Samsung (OTCMKTS:SSNLF). Apple has been working to diversify its revenue sources beyond iPhone sales. The company has placed a big focus on the service business. In fact, Apple is close to a revenue milestone in its services division this year.
Apple stock has gained 6.5% since the company reported record services revenue for the March quarter.
The company’s services include the Apple TV+ video streaming service, which launched in November 2019. Apple TV+ entered a crowded market dominated by Netflix (NASDAQ:NFLX). Now, the market has been disrupted by Disney+ from Walt Disney (NYSE:DIS).
To bolster its video streaming service, Apple will pay $70 million to purchase Sony’s WWII ship drama Greyhound, according to CNBC. The movie stars Tom Hanks. Overall, the Sony movie deal could help Apple attract more video subscribers. The move could boost service sales at a time when the demand for video streaming has spiked amid pandemic lockdowns.