Why Did The Apple Stock Jump, Even Though The Market Crashed?


Apple’s stock price climbed 3.2% on Tuesday, despite a sharp fall in the major market indices.

Investors were surprised by the comments made by the Federal Reserve Chair Jerome Powell, which suggested that the powerful central bank could pull back on stimulus measures sooner than it forecasted. Many analysts had expected the Fed to adopt a more supportive stance toward the economy after health officials detected a worrisome new coronavirus strain that threatens to derail the market’s recovery.

Powell’s comments, however, indicated that this might not be the case. Investors reacted by selling off several stocks. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, in turn, all fell more than 1.5% on the day.

Apple Is The One Ray Of Hope In This Storm

Apple seemed to survive through that turmoil. It appears to be serving as a ray of hope in the storm for investors seeking the means to protect their wealth during a possible stock market crash.

Shareholders no doubt appreciate Apple’s tremendous profit and cash flow generation, as well as its fortress-like balance sheet. The iPhone maker produced a staggering $95B in net income and $93B in free cash flow over the past 12 months. It also has a staggering $190B in cash and investments in its vaults. 

This unrivaled financial fortitude makes Apple able to withstand even the worst market downturns while continuing to reward its shareowners with massive stock repurchases and a steadily rising dividend income stream.

Moreover, Apple has some promising long-term growth initiatives that could push its stock to even greater heights. The tech giant is reportedly working on some intriguing virtual and augmented reality projects, as well as a self-driving car venture. When combined with its highly regarded chip development efforts for its iPhones, Macs, and iPads, Apple’s bold new bets suggest that technological innovation is alive and well in this new $2.7T behemoth.