The tech firm’s latest product launch will garner plenty of attention on Tuesday with Apple expected to reveal its new iPhone 15 models and Apple Watch products.
The new smartphones are likely to have slight improvements in terms of their chip and camera functionalities — and a new USB-C charging port is also expected to be part of its fresh line up in order to comply with European regulations.
Victoria Scholar, head of investment at Interactive Investor, said that the launch has been overshadowed by reports that China is clamping down on the use of iPhones among government officials there, as US-Sino tensions intensify with technology becoming a key battleground.
“Shares in Apple were under pressure last week, weighing on its suppliers like Qualcomm too. But shares in Qualcomm rebounded on Monday following the announcement of a deal with Apple to supply 5G chips through to 2026,” she said.
Scholar further noted that despite the recent uncertainty, Apple remains a standout stock market winner this year, rebounding from last year’s "tech wreck" which heavily punished the sector.
“While Apple’s services revenue has been improving, iPhone demand has suffered amid a softening consumer and a lengthening product upgrade cycle. Plus there are wider concerns about whether the first half rally could wane during the final months of the year as a cocktail of headwinds spark nervousness towards growth stocks and risk-on assets more broadly across markets,” she added.
Investors will be keeping across Google stock on Tuesday as the company faces a landmark court action brought by the US government, which could have an impact on the landscape of the tech sector.
The US department of justice and a group of attorneys general will put forward the argument that Google abused its dominant position in the search engine market to stifle competition from rival operators.
The case, which was originally filed under the Trump administration in 2020, alleged multiple violations of federal antitrust legislation. Under Biden, a subsequent case was filed based on Google’s market dominance in advertising technology.
Read more: Stocks that are trending today
Google has strongly denied the accusations and said it did not violate antitrust law. In January, it said in a court filing that its browser agreements were “legitimate competition” and not “illicit exclusion”.
The case, which gets underway today in Washington, is expected to last for about 10 weeks with a ruling not likely to be handed down until next year.
Shares in Tesla soared 10% after Morgan Stanley said on Monday that the company’s in-house Dojo supercomputer could fuel a $500bn (£400.9bn) jump in its market value.
Analysts called Tesla’s stock a "top pick" and raised their price target to $400 from $250, representing a potential upside of nearly 50% from current levels.
Lead analyst Adam Jones said Dojo should help improve Tesla’s driving technology, which requires immense computing power.
"The more we looked at Dojo, the more we realised the potential for underappreciated value in the stock," Jonas said. "We believe Dojo can represent the next step-change in market perception of Tesla."
Business Insider’s Matthew Fox said that if Tesla reaches Morgan Stanley's $400 price target, it would have a valuation of nearly $1.3trn.
Associated British Foods (ABF.L)
Shares in Associated British Foods climbed 3.40% on Tuesday after the food, ingredients and retail group raised its full-year profit outlook for the second time in four months, driven by strong trading from both its Primark clothing business and its food operations in its latest quarter.
Following a bumper third quarter, sales at Primark are now expected to hit £9bn for the year, which would represent growth of 15% over the previous year and of 9% on a like-for-like basis.
“Given the widely reported constraints on consumer spending, this has somewhat ironically played into Primark’s hands given its value offering. At the same time, a warm reaction to its new ranges and strongly performing new stores have added to the optimism, while the group has also been able to pass on selective price increases without harming volumes in an effort to contain its own rising costs,” Richard Hunter, head of markets at Interactive Investor, said.
Hunter also noted that Primark’s outlook is poised to benefit from a number of factors swinging in its favour, including lower material and freight costs, favourable exchange rate movements and price increases, which are likely to offset its own input costs.
On Primark’s foray into the US, Hunter said: “In a land of major opportunity, the group is steadily increasing its presence and with four new stores opened in the last three months and with fourth quarter sales expected to rise by 45%, this area of growth is certainly one to keep an eye on.”
Meanwhile, Charlie Huggins, manager of the ‘Quality Shares Portfolio’ at Wealth Club, said it shows that the high street isn't dead and shoppers still love a bargain.
“But you need a brand that resonates strongly with consumers. Primark has that. This should leave it strongly positioned whichever way the economic winds blow."