Why Apple Stock Popped Friday Morning
Key Points
Apple increased iPhone sales in China in Q1, even as overall smartphone sales in the country declined.
The company is well-positioned to continue its winning streak in the country.
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Shares of Apple (NASDAQ: AAPL) climbed on Friday, adding as much as 3.4%. As of 12:40 p.m. ET, the stock was still up 3.1%.
While the cease-fire and the opening of the Strait of Hormuz certainly boosted investor sentiment, news of increasing iPhone sales in China was the catalyst that sent Apple stock higher.
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Image source: Apple.
Taking share
While overall smartphone sales in China continued to decline, Apple's iPhone saw its market share increase, according to new data from Counterpoint Research. Shipments of the flagship device increased 20% year over year in the first quarter, despite a 4% decline in overall smartphone shipments. This marked the strongest performance among all the major brands in China, according to the report.
After a drought in iPhone sales in 2024, there was a significant rebound late last year. The iPhone saw "staggering demand" that drove record sales as 2025 came to a close, according to Apple CEO Tim Cook. Moreover, the iPhone was the top-selling smartphone brand in China in the final quarter of last year, according to Counterpoint Research.
Weak smartphone demand in one of Apple's biggest markets has been a concern for investors, but the company has been pressing its advantage. Despite a spike in global memory prices, Apple has held its prices steady even as rivals have raised theirs, allowing the company to gain market share. Counterpoint notes that "Apple is widely viewed as best positioned to navigate the ongoing global memory crunch, supported by its premium product portfolio and strong supply chain management."
At 33 times earnings, the stock is selling at a slight premium, but consider this: Apple boasts five of the world's top 10 best-selling smartphones, and 2.5 billion active devices, giving the company unsurpassed reach. Given the company's industry-leading position and unrivaled scale, that premium is justified.
That's why Apple stock is a buy.
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Danny Vena, CPA has positions in Apple. The Motley Fool has positions in and recommends Apple and is short shares of Apple. The Motley Fool has a disclosure policy.
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