The $327 billion rally: Apple struggles through the darkest hours of the iPhone era and closes back in on its trillion-dollar valuation
- Apple's stock charged its way up to $212 in pre-market trading on Wednesday, after reporting its worst-ever decline in iPhone sales.
- It cements a $327 billion rally in its market cap since January 3, when Apple issued an explosive sales warning on holiday trading, blaming weak iPhone sales in China.
- A number of analysts think the downturn in iPhone sales has got as bad as it is going to get, with the market bottoming out.
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Apple stock has been on a steady recovery rally in recent months, which looks set to be cemented by a Wall Street vote of confidence in the iPhone maker's latest earnings.
Since hitting an 18-month low of $142.19 on January 3 - directly after Apple issued an explosive sales warning on holiday trading after iPhone sales took a hit in China - Apple's stock charged its way up to $212 in pre-market trading on Wednesday.
If these gains hold during normal trading hours, it means Apple's stock will close the day on a high not seen since November last year.
The $212 pre-market share price marks a $327 billion rally since January 3, putting Apple's market cap at $999.7 billion. It means Apple is close to the trillion-dollar valuation it broke last year when it became the world's most valuable company.
Wall Street responded warmly to Apple's second-quarter earnings, published Tuesday. The company beat expectations, posting revenue of $58 billion, with higher than forecast iPhone and services sales.
Read more: Apple's shares jump as its Q2 numbers beat the Street
The view of some analysts was that the downturn in iPhone sales has got as bad as it is going to get after Apple's brutal earnings warning in January, described by Wedbush at the time as "the darkest day in the iPhone era."
iPhone sales may have fallen $7 billion year-on-year in Q2, but Wells Fargo said "we are now seeing indications stabilizing / bottoming iPhone demand" in a note to clients. Bank of America Merrill Lynch agreed: "iPhones/China have bottomed out and are improving." Credit Suisse also noted that the "iPhone likely bottomed."
It's a view that was echoed by Apple CEO Tim Cook, who struck a relieved note on an earnings call Tuesday. "We certainly feel a lot better than we did 90 days ago," he said.