Apple Inc. (AAPL) Surges 7.26% on New AI Features: Technical and Fundamental Analysis for Investors, 1 month ago

Apple Technical Analysis

Apple Inc. (AAPL) closed at $207.15 on June 11, 2024, marking a 7.26% increase driven by announcements of new AI features. The stock reached an intraday high of $207.16, which is its year high, and an intraday low of $193.64. This breakout above the previous resistance levels has created a bullish sentiment. The Relative Strength Index (RSI14) of 71 indicates that the stock is overbought, suggesting a potential short-term pullback. The 50-day moving average is $179.97, while the 200-day moving average stands at $181.79, both considerably below the current price, confirming the ongoing uptrend. The Moving Average Convergence Divergence (MACD) at 4.93 signals positive momentum. The stock exhibits high volatility, as indicated by an Average True Range (ATR) of 1.88.

Fundamental Analysis

Apple's market capitalization is approximately $3.18 trillion, with a P/E ratio of 32.17, which reflects high investor expectations. The stock's EPS stands at $6.44. Future performance will be closely watched ahead of the earnings announcement on August 1, 2024. The company's recent announcements at the WWDC about iOS 18, enhanced by AI features and a partnership with OpenAI, have significantly boosted investor sentiment. However, the involvement in an antitrust lawsuit poses a potential risk that should be monitored. Analysts' price targets range from $110 to $275, with a median target of $195, suggesting a mixed outlook. The consensus is generally positive with 1 strong buy, 25 buys, 9 holds, 2 sells, and no strong sells.

Short-Term Prediction

Apple For the next trading day (June 12, 2024), AAPL might experience some profit-taking due to its overbought RSI and recent sharp rise. Investors could see intraday volatility with a potential dip towards the support level of $183.38 but could bottom out above the stop-loss level of $199.73.

One-Week Prediction

Over the upcoming week, AAPL could consolidate as it digests its recent gains. If bullish sentiment due to AI features persists and outweighs concerns from the antitrust lawsuit, the stock might test new highs above $207.16. Otherwise, a correction towards the 200-day moving average could be anticipated.

Intrinsic Value and Long-Term Potential

Using the discounted cash flow model, AAPL has an intrinsic value of approximately $135.93, which is significantly lower than its current market price. This disparity suggests that AAPL may be overvalued in the short term. Nevertheless, the company's innovation, economic moat, and strong market position underline its long-term investment potential. Upcoming earnings and successful integration of AI features could reevaluate the intrinsic value upwards. remains a robust long-term investment due to its continuous innovation and market dominance. However, the near-term overvaluation and potential legal risks suggest cautious optimism. Investors may consider holding the stock, keeping a close eye on the developments surrounding its AI initiatives and legal challenges. The high P/E ratio and the discounted cash flow value indicate a potential for a market correction, but the company's intrinsic strengths should sustain its market leadership in the long run.

Check full Apple forecast and analysis here.