‍Apple shares experience strongest day since 2022 following earnings surpass expectations and a $110 billion stock repurchase announcement.‍

Apple shares saw their strongest performance since 2022 after the company's earnings exceeded expectations and it announced a $110 billion stock buyback. This significant financial maneuver underscores Apple's robust financial health and investor confidence.

Apple shares surged 6% on Friday, following the announcement of better-than-expected earnings for the second quarter and the initiation of the largest stock buyback program to date. This marked the stock's most significant day since November 30, 2022.

On Thursday, Apple declared it would buy back $110 billion of its shares, setting a new record for the largest buyback in U.S. history, eclipsing its previous repurchases. The company reported earnings of $1.53 per share with revenue hitting $90.75 billion, surpassing the forecasts by analysts who expected earnings of $1.50 per share on $90.01 billion revenue, as per LSEG data.

However, overall sales fell by 4%, and iPhone sales saw a 10% decline from the same quarter last year, reflecting waning interest in the latest iPhone models. Apple’s CEO Tim Cook, in a discussion with CNBC, attributed the quarterly sales dip to tough comparisons with the same period last year.

Bank of America analysts maintained a buy rating on Apple stock, labeling it a preferred selection and increased their price target from $225 to $230 on Friday. They anticipate that Apple will introduce generative AI capabilities to the iPhone within the year.

They commented, "Apple's iPhone sales are climbing in Mainland China, with positive adjustments in estimates and the introduction of GenAI features expected to propel a significant upgrade cycle."

On Thursday, JPMorgan analysts, who kept an overweight rating, raised their Apple price target to $225 from $210, citing robust year-over-year iPhone revenue and the potential for an upgrade cycle boost in iPads, especially with Apple's upcoming product launch event the following week.

They noted, "Despite only modest revenue growth year-over-year, it now highlights potential for greater revenue in future years, driven by product cycles across hardware and an AI-powered smartphone cycle."

Morgan Stanley analysts also reiterated an overweight rating for Apple and increased their target price to $216 from $210 on Friday. They pointed to the company’s strong quarterly performance, increased iPhone shipments to China in March, the substantial stock buyback, and upcoming AI innovations. Their sentiment was optimistic, stating, "It’s hard not to become more bullish here."

Source: CNBC