The Apple stock price has been in a spectacular rally recently as investors remain optimistic about the company. The stock is trading at $174, which is a few points below its all-time high. It has risen by about 40% this year, pushing its total market capitalization to more than $2.8 trillion.

Apple’s rise

Apple is the biggest company in the world by market capitalization. The firm makes most of its money from iPhone sales. Other key parts of its business are the Macbooks, Apple Watch, iPads, and their accessories. Most importantly, the company makes a significant amount of money from its services like Apple TV+, Apple Music, and iCloud.

Apple has had a mixed year in 2021. On the positive side, demand for its products, especially the iPhone and the Apple Watch, has been rising in the past few months. But there are signs that this growth is flattening. This month, Apple warned its suppliers about this slow growth.

unconvinced consumers

At the same time, the ongoing chip shortage has had a negative impact on the firm’s revenue and growth. Indeed, in the most recent quarterly results, the company estimated that the chip shortage had cost it revenues of about $6 billion.

Another challenge that Apple is facing is that the demand for some of its services is declining as the world economy reopens. For example, like with Netflix (NFLX), more people cancel their Apple TV+ subscriptions. 

Why is the Apple stock rising?

There are several reasons why the Apple stock price is getting red hot. First, analysts believe that the company will be a key winner in the metaverse. This is an industry that allows people to interact and do business with each other in a virtual world. The company will win in the industry because of its devices, which will have a role in the industry. For example, it is working on a next-generation virtual reality device that will launch in 2024.

Second, the stock has jumped because of the overall rush to safety. In the past few weeks, as volatility has risen, investors have moved to the safety of quality blue-chip companies. Apple is seen as a good company because of its strong balance sheet and stable revenue. It is also a free cash flow machine.

The rotation to Apple’s safety can be evidenced by the overall weak performance of momentum stocks. In the past few months, momentum stocks like Roku, Zoom Video, and Teladoc have all crashed by double digits.

Third, the Apple stock price has risen because of high Wall Street expectations. Most analysts who track the company have been relatively bullish. For example, this month, analysts at Morgan Stanley and Wedbush upgraded their estimates of the stock to $174. 

The Wedbush analyst expects that the firm’s valuation will soar to more than $3.5 trillion. They both cited the company’s strong fundamentals and the fact that the firm has a strong lineup for 2022. Also, they mentioned the secretive Apple Car project.

Finally, the company won some reprieve with its ongoing battle with Epic Games. Epic filed an appeal that challenged Apple’s app store payments.

Apple stock price forecast

The daily chart shows that the Apple stock price has done relatively well in the coming days. The stock gained momentum after it soared above $157, which was the highest level on September 8. It is above the 25-day and 50-day moving averages. 

Therefore, while the stock will maintain a bullish trend in the long term, we can’t rule out a break and retest pattern. This is where the stock retests the key support at $157 and then resumes the bullish trend.

The daily AAPL stock price chart