Apple is a so-called tent-pole stock that dominates investor attention and can help define investment narratives, according to Nicholas Colas, co-founder of research firm DataTrek.The S&P 500 is still down 10% in 2022 despite rallying since June.
Apple’s shares, on the other hand, are on the cusp of turning positive for the year after tumbling with other technology stocks in the first half.In snapping up Apple shares, investors are betting that the iPhone maker’s strong balance sheet will allow it to continue returning cash to shareholders and wring big profits out of its more than 1 billion users despite the potential for a recession in the US with the Federal Reserve bent on fighting soaring inflation.
“Apple is a safe haven that people flock to when uncertainty abounds in the rest of the market,” said Daniel Morgan, senior portfolio manager at Synovus Trust.Like the broader market, risks to Apple’s ascent abound. Inflation is weighing on consumers while China’s stringent Covid-19 policies pose a lingering threat to its supply chains.