Cramer Cautious Despite Analyst Upgrade
Apple Inc. (AAPL) saw its stock rise on Monday, fueled by an analyst upgrade from Bernstein's Toni Sacconaghi. However, CNBC host Jim Cramer expressed skepticism about the rally's sustainability, advising investors to hold off on buying Apple shares.
Sacconaghi upgraded Apple shares from neutral to buy, citing the potential for a strong iPhone 16 cycle and a temporary downturn in China. Despite this, Cramer urged investors to wait and see, especially with Apple's earnings report due on Thursday.
"Unlike Toni, I want you to own Apple, not trade it, even as I suspect this quarter will be weak and the next quarter will be worse," Cramer said. "But I'm with him that you should buy the stock — I just think you need to wait it out, because now you've got a Sacconaghi spike on top of what could be a bad quarter."
Cramer acknowledged Sacconaghi's expertise but questioned the timing of his upgrade, given his historical skepticism about Apple's stock. "Apple rallied on an upgrade from an analyst who, historically, does not have a great understanding of this particular stock," Cramer said. "That's a much less inspiring kind of rally with no staying power to speak of."
Apple's stock has been under pressure due to various factors, including its performance in China and the upcoming earnings report. The company is also on the brink of several product launches, which could potentially reshape its trajectory.
Despite the recent rally, Apple's stock has been on a downward trend, with a 12% decline in 2024. The company is set to unveil new products, including enhancements to the iPad lineup and a potential refresh of the iPhone lineup, at a digital launch event scheduled for May 7.
Apple's stock has been impacted by slowing iPhone sales and weakness in China, among other challenges. These issues have led to a 13% drop in China sales in the December quarter, with another drop expected in the first quarter of 2024.
On Monday, Apple closed trading at $173, reflecting a 2.48% increase. Year to date, the stock has declined by 6.54%.