Apple Inc. AAPL shares have gained over 10% in the past month, with CNBC’s Jim Cramer attributing recent momentum to Chinese government subsidies covering Apple products.
What Happened: “Apple phone qualifies for China subsidies.. big reason why ramping last few days,” Cramer wrote on X on Thursday.
The development comes as Apple grapples with challenges in its second-largest market, having reported an 11% decline in Greater China revenue to $18.51 billion in the first quarter.
During the company’s recent earnings call, CEO Tim Cook addressed China’s national consumer subsidy program, which was announced on Jan. 20 and covers smartphones, tablets, PCs, and smartwatches up to certain price thresholds.
While some provincial subsidies were active in the December quarter, Cook noted the broader national program’s potential future impact: “We do see fiscal stimulus occurring,” he said, maintaining an optimistic outlook despite regional headwinds.
Why It Matters: The subsidies are part of what Morgan Stanley describes as China’s “most aggressive stimulus tone in a decade,” aimed at boosting consumption through moderately loose monetary policy. This comes as China’s GDP growth in 2024 fell below targets, growing between 2.4% and 2.8% according to Rhodium Group estimates.
Gene Munster, managing partner at Deepwater Asset Management, provided context for Apple’s apparent downturn in China, suggesting that roughly half of the weakness was due to inventory management rather than fundamental demand issues. “The mess wasn’t as big as it looked in the numbers,” Munster stated on X.
Looking ahead, analysts are monitoring potential challenges, including U.S. trade policies under President Donald Trump‘s administration that could impact Apple’s Chinese market operations. However, the company continues to embrace local innovation, with Cook expressing support for Chinese AI developments during the earnings call.
Price Action: Apple’s stock closed at $245.83 on Thursday, up 0.39%. The stock is up 3.74% in five days, 0.81% year to date, and 35.40% over the past year, according to data from Benzinga Pro.
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