What happened
Shares of Apple (AAPL -0.20%) surged by 49.3% in the first half of 2023, according to data provided by S&P Global Market Intelligence.
The technology company has reclaimed the $3 trillion market capitalization level after briefly hitting that milestone back in January 2022.
So what
Apple's shares have steadily risen this year in line with the 32% gain in the Nasdaq Composite index. Several technology stocks linked to the generative artificial intelligence (AI) craze have seen their share prices jump as investors express optimism that this new, cutting-edge technology can be utilized to help Apple craft a new stable of generative AI products. The iPhone maker has advertised for a dozen or more jobs in generative AI, with job descriptions looking for "machine learning specialists."
Apple's fiscal results for the first half of 2023 were not particularly impressive, but the company did manage to break several records that got investors excited. Revenue for the first six months of the fiscal year fell by 4.2% year over year to $212 billion while net income declined by 9.2% year over year to $54.2 billion. Services revenue hit an all-time quarterly high and iPhone sales also scaled a new record for Apple's March quarter, proving that the company can continue to grow these two revenue sources despite the twin economic headwinds of high inflation and surging interest rates. CEO Tim Cook has also remarked that Apple's installed base of active devices hit an all-time high, an impressive feat that is a testament to Apple's large fan base and brand loyalty.
Now what
To diversify its manufacturing bases and decrease its reliance on China, Apple intends to shift some of the production of its iconic iPhones to India. Cook traveled to India earlier this year to witness the opening of two Apple stores there, and the company was already manufacturing 3.5% of its iPhones there in 2022. China's zero-COVID policy has spurred management to look for an alternative manufacturing base to reduce future disruptions to its supply chain should another crisis break out. Eventually, the company is aiming to manufacture a quarter of its iPhones in India.
Investors can also look forward to Apple's recent announcement of its new Vision Pro mixed-reality headset. Priced at $3,499, Apple may introduce a rollout strategy for this new product similar to when the first-generation Apple Watch was released. While the unveiling of this new product category has generated a buzz among technology enthusiasts, Apple is now planning to scale back its internal sales target of 1 million units and has also pushed back plans for a cheaper version of the product. The product is expected to be launched in the U.K. and Canada by the end of next year and will probably only be available to the general public by 2025.