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Why Investors Found Apple Stock Tempting Today

What happened

Most investors are cool on tech stocks these days, but enough of them warmed to Apple (AAPL 1.57%) Tuesday to give an encouraging little rise to its share price. Thanks to some news about its global operations and positive comments from an analyst, the company’s stock closed nearly 2% higher on the day, in contrast to the over 1% decline of the S&P 500 index.

So what

In an official company blog post, Apple revealed that will soon start raising prices in its App Store for certain regions and countries. These include all countries that use the euro as a currency, plus a clutch of other large and small markets in Europe, Asia, and South America. Non-eurozone countries that will see increases include Egypt, Chile, Japan, and South Korea.

The hikes will start to take effect on Wednesday, Oct. 5, Apple said.

The move comes as the U.S. dollar continues to be a strong currency when matched against peers like the euro or the Japanese yen. A strong dollar reduces the take for U.S.-based Apple from such currencies, hence the need to make adjustments.

It should be noted that this isn’t a unique, one-off move by the company. It periodically makes pricing adjustments based on factors like this.

Meanwhile, noted Apple tracker Daniel Ives from Wedbush reiterated his outperform (read: buy) recommendation on Apple stock, at a $220 per share price target. In a new analyst note, Ives cited the “brisk sales” and lengthening customer wait times for the new iPhone 14 as a key reason for his continued optimism.

Now what

Apple’s services business — which includes the App Store and its massive inventory of titles — has become increasingly important to the company. Compared to Apple’s other revenue stream (products), it’s growing more robustly, to the point where it comprised nearly $20 billion in revenue in the tech giant’s most recently reported quarter.

Meanwhile, Apple device owners tend to be relatively affluent and fond of their apps, so there shouldn’t be too much resistance to the price hikes.

Eric Volkman has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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