Apple Stock Gets A Bump on Vision Pro. Will it Last?
Apple Stock Gets A Bump on Vision Pro. Will it Last?
The headset brings digital content into a person’s physical space to make for a mixed reality
- Apple is back in the spotlight as Vision Pro goes viral.
- The China slowdown and Apple Watch woes present headwinds.
- Options traders have decent premium to make plays post earnings.
Vision Pro: Is it a game changer for Apple?
Apple (AAPL) is in the spotlight again after the technology giant’s Vision Pro blew up on social media over the past week after it officially went on sale at the modest price of $3,500. The headset is a spatial computer that brings digital content into a person’s physical space to make for a mixed reality.
Videos of people using the headset on X, formerly Twitter, have garnered hundreds of millions of impressions. Some see it as a revolutionary piece of technology, while others view it as the next step toward something like an episode of Black Mirror. In any case, Apple Vision Pro is causing a lot of excitement and rightfully so.
Where is Apple stock headed?
Apple hasn’t had the greatest time of it so far in 2024. The stock price remains down on the year after a 4.22% drop in January, but prices are back on the up in February following the Vision Pro release.
So, what else is impacting Apple? Sales of its Apple Watch are expected to underperform after losing the ability to monitor blood oxygen for U.S. models because of a patent infringement lawsuit. That was a popular feature for fitness fanatics, who will now likely turn to other brands.
Meanwhile, Apple is losing market share in China—one of its most critical regions for growth. In its latest earnings report, Apple reported a double-digit drop in revenue from China. CEO Tim Cook sounded concerned about the drop but remained optimistic about long-term growth in Greater China, which includes Taiwan, Hong Kong and Macau.
An overall slowdown in the Chinese economy doesn’t help its case, but it is also facing renewed competition from Huawei and its foldable phones, which are preferred by China’s most tech-savvy consumers. Analysts and investors will be watching sales figures in China with extra scrutiny over the coming quarters. If Apple loses its top spot in China to Huawei, it could add a more permanent headwind for the stock price.
Trading Apple
Apple just released its earnings numbers for the quarter ending in December, so investors have some time to assess the company’s performance before the next quarterly figures. Along with China, investors will also be watching for consumers’ reaction to Vision Pro, which has so far been broadly positive. That will have to translate into sales, which may be hard to do at the price point. If Apple can pull it off and turn Vision Pro into the next household item for tech-loving consumers, it could add another considerable revenue driver for the company for years to come.
Currently, the stock is trading with an implied volatility rank (IVR) of 30.3, and it offers some decent premium across its weekly and monthly expirations. For the March 15 expirations, the options market is pricing an implied move of +/- 7.9 points. Traders may want to play an iron condor if they believe Apple will stay near the bounds of that move. If so, setting the short strikes slightly outside that range would be one way to play that strategy.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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