Apple shares have been on a tear and by mid-November have rallied more than 80% year to date. The electronic maker than still drives most of its revenue from the iPhone has continued to make gains in the services industry. While Apple has taken advantage of new products to lift its share price Google share trading has lagged, but is in the process of playing catchup.
Apple Continues to Garner Praise
The upgrade parade helped lift Apple shares to all-time highs in November. Morgan Stanley believes the services business will hit 20% next year buoyed by Apple TV+. The $4.99 price tag according to Morgan Stanley is a very attractive price point. Morgan Stanley currently has a price target of $280 per share which is the highest on the street.
Apple has also said that the promotion of its streaming service will not hit its bottom line. The company is offering one year free to customers who buy one of its devices starting in November. According to Goldman Sachs, who believes the costs will weigh on earning, Apple is planning to incorporate the costs of the promotion of the streaming services as a discount into the price of the hardware it sells.
Apple Phone Sales are Forecast to Rise
Guidance from Apple continues to point to very strong sales. In October, Apple forecast the holiday revenue would surpass expectations suggesting healthy appetite for iPhone 11 models. Apple also stated that they expect a report to growth in 2020 when the company introduces 5G models. Additionally, sales and costs of certain gadgets that are built in China have suffered. AirPods, have been hit with 15% tariffs, and President Donald Trump hasn’t ruled out the possibility of a levy on iPhones starting December 15, 2019.
Alphabet Starting to Break Out
Alphabet shares, which is the parent company of Google, are starting to break out to fresh highs and appear to be in catchup mode. The company has produce many new products, with the best sellers in the nest family. This includes hardware related to the home, such as temperature monitors as well as home security.
Google has also faced some legal issues which has held the price of the stock down. The company is currently facing pressure from EU regulators to change. In March 2019, when EU regulators fined Google $1.7 billion for abusing its dominant position in online search advertising. The anti-trust issues allowed the EU commission to mandate that Google change the way it pushes its apps on Android users, and how it uses its search engine to boost its own shopping service.
Google has had some wins against the EU commission which has helped its share price. In September a Judges at the Court of Justice of the European Union ruled Google did not have to apply some of the region’s privacy standards globally.