Neil Cybart: No, that Bloomberg report did not send Apple to record highs

From a note that reached Above Avalon subscribers Monday before Apple broke through at $165:

Last week, AAPL shares hit an all-time high, surpassing the previous high of $156.46 (adjusted for the most recent dividend). Many were quick to point to Project Titan news as the catalyst for the momentum in shares. However, that is not true. Instead, AAPL shares have been outperforming the overall market since early October. AAPL shares are up 15% in the past six weeks vs. the S&P 500 being up 10%.

Before we go any further, it’s important to point out how that 10% performance for the S&P 500 is shockingly strong. With the tech giants representing such a large portion of the S&P 500 index (top five make up 22% of the index), a fair question to ask is, which is leading which?…

We can create rather easily a laundry list of possible reasons for the giants outperformance:

    • The latest earnings season was strong for the giants. While a few may have come in light vs. expectations, it’s tough to argue the giants are underperforming from a marketplace perspective.
    • Investors are betting that there will be some kind of rotation into mega caps. Some may have tried to front run such a move, which simply means investors bet on others coming in behind them and buying shares in the giants.
    • Some investors may look at the higher inflation / troubled supply chain environment as a good thing for the giants who have the financial means to buy their way out of trouble by either passing on higher costs or not getting caught in shipping issues.
    • Some investors are simply betting that equities will remain in favor in the current inflation environment, especially if new age assets like crypto show signs of faltering or cooling down.

The point in this exercise is to show how many variables, or factors, are likely at play with the giants’ outperformance, including that of Apple. It would be a mistake to simply chalk up Apple’s strong performance to one item – like a recent report about a new product or any other singular news item. Instead, a number of factors have come together to lead to higher demand for Apple shares, which results in higher stock prices so that demand and supply for shares reaches equilibrium.

My take: Cybart can be right without making Mark Gurman wrong.


  1. David Emery said:
    Gee, I thought it was the 39 shares I sold from my stash that moved the market. Certainly a connection, I sold, then the stock price jumped. 🙂 🙂

    November 22, 2021
    • Romeo A Esparrago Jr said:
      Thank you for moving the market, David 😉

      November 23, 2021
    • Alan Birnbaum said:
      Do it again, do it again !!!

      November 23, 2021
  2. Fred Stein said:
    Perhaps I’m naive, but maybe investors finally realized that Apple IS a GROWTH stock.

    No joke. When folks like Toni blast their false narrative, the TV hosts never challenge.

    November 22, 2021
  3. Gregg Thurman said:
    With regard to Apple buying, then retiring, shares as a means to stabilize AAPL volatility, I think Apple disagrees, as each stock split increases the number of tradable shares, and in so doing contradicts Joe’s reduced share theory. It’s that or Apple doesn’t care about achieving that stability.

    In either case the reduction of shares theory spoken of here is a myth that will never be achieved, because the controller of shares outstanding (Apple) is doing nothing to achieve a net reduction in shares outstanding.

    November 22, 2021
    • Rodney Avilla said:
      Instead of thinking of the number of outstanding shares, think in terms of percent ownership of a investor. In other words, I can say I own X number of shares, or I can say I own X% of aapl. With a share split, my share number increases 2X, but my % of ownership stays the same, same value. Splitting share does not hurt nor help me. When Apple buys back shares, my share number stays the same, but my % of ownership increases. I now own a bigger piece of the pie. So share reduction is helpful, regardless of the number of times shares have spit, but in terms of relative numbers (my number of shares relative to the total number outstanding). When the total number of outstanding shares go down, but my number stays the same, I own a larger % of the company.

      November 22, 2021
  4. Daniel Epstein said:
    Today’s close is still within 5% of the previous all time high so not an unreasonable large move in valuation. 172 would be just 10% over the adjusted 156.40 previous high. So given the news about IPhone 13 and car rumors the stock is not going parabolic yet. Just getting into alignment with the average of the S&P 500 for the most part. This means the stock price could have a reason to stick around this valuation instead of being an untradeable peak.

    November 22, 2021
  5. Robert Paul Leitao said:
    I think we can very much over think moves up and down in Apple. Too often when the shares appear to be underperforming the market we lament Street analysts “don’t get Apple.” When the shares suddenly out perform the market, we analyze every bit of Apple-related news to the point of exhaustion trying to figure out why. The shares are moving higher because Apple continues to trade at a significant discount to long-term value.The shares will continue to trade higher over time. From time to time the shares can and will trade at a lower prices. Some days it rains. Most days it’s sunny or partly cloudy.

    November 23, 2021
    • Gregg Thurman said:
      Another upvote representing millions.

      November 23, 2021

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