Apple (NASDAQ:AAPL) stock continues its rise despite the risk of another wave of coronavirus infections. The stock hit another record high on Tuesday after it jumped 2.13% and closed at $366.53. Apple also had a record high closing on Monday. The stock has hit new highs several times this month.
Notably, Apple’s rally this week comes after the company used its annual WWDC (Worldwide Developer Conference) keynote to share a product vision. The market embraced the company’s product vision quickly. For example, Apple CEO Tim Cook used his WWDC keynote to reveal plans to switch to Apple’s custom chips for processors in Mac computers. Mac is Apple’s line of laptop and desktop devices. Currently, Apple powers Mac computers with processor chips from Intel (NASDAQ:INTC). Cook explained that Apple would be able to produce better Mac computers by ditching Intel processors for its custom chips. Notably, the Mac product line is Apple’s second-largest source of hardware revenue after the iPhone.
Market downplays lower iPhone sales in China
Apple stock soared to a new all-time high Tuesday despite a report showing that iPhone sales dipped in China last month. According to CNBC, Apple sold 3.6 million iPhone units in China in May. The amount was down 7.7% from 3.9 million iPhone units sold in China in April. Notably, Apple’s iPhone sales in China soared in April after the company released the low-cost iPhone SE.
Despite iPhone sales dropping in May, Apple actually fared better than the broader market. China’s smartphone sales fell about 20% in May compared to a 7.7% drop in iPhone sales. While iPhone sales dipped, the App Store sales in China jumped about 11%. The App Store is a component of Apple’s services division, which is nearing a revenue milestone this year. The growing services business has become a top priority for Apple. The company wants to diversify its revenue sources. Therefore, the App Store sales growth might have encouraged investors to pile into Apple stock while downplaying weak iPhone sales.
Apple might acquire Sonos
The latest rally in Apple stock coincides with a prediction that the company might acquire Sonos (NASDAQ:SONO). Citron Research, led by notorious short-seller Andrew Left, thinks that the time is right for Apple to purchase Sonos. Sonos is known for its brand of high-quality sound devices. The company also ventured into the smart speaker business. Sonos and Apple stocks jumped on Citron’s buyout report. The market seems to think that buying Sonos would bolster Apple’s competition in the lucrative smart speaker market, which is currently dominated by Amazon.