The incredible breakout in shares of Apple (AAPL) led to the iPhone giant reclaiming the title of largest company by market capitalization. It is now worth more than Nvidia (NVDA) again. AAPL stock closed at $333.74, near a new high. NVDA stock peaked at $236.54 in May and closed at $202.81.
Apple sold off last month when the firm announced steep price hikes for its hardware. iPad, Apple TV, and MacBook laptops saw meaningful price hikes. Last week, the firm quietly raised some of its service prices. Apple Music, for example, is a dollar higher per month, at $11.99.
Traders should consider taking profits on AAPL stock. They likely bought shares to hedge against the over-valued technology sector. Despite shares trading at a forward P/E of 38 times, the stock is relatively better valued.
Consumers might ignore the higher device and services costs. More importantly, Apple did not raise prices of its main iPhone models. Still, consumers might consider higher total inflation hurting their income. They could avoid a device upgrade, deciding that the AI app is not worth paying for an expensive new iPhone.
Tech investors are treating Nvidia stock as a benchmark. Its volatility is minimal, but if the stock price falls, it might signal a bigger drop in the semiconductor sector.
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