Apple is about to unveil its first foldable iPhone. How will this affect its stock price?

On Wednesday, September 9, Apple will hold a product launch event: it is expected to unveil the first foldable iPhone, among other products. Although there is a buzz among consumers about the possible new product, Wall Street remains cautious in assessing how it will affect the stock, according to CNBC. Investors aren’t expecting a significant move in the stock price, and some believe the news could prompt some market participants to sell their shares, the network explains.

— Apple’s presentation could turn out to be a “sell-the-news” event: in such a scenario, the stock rises ahead of the announcement and then falls after the news is released, suggested Bank of America analyst Vamsi Mohan, as quoted by CNBC. Mohan’s research showed that shares fell the day after 10 of Apple’s 24 product presentations since 2007. In five other cases, the stock remained virtually unchanged, and in nine cases, it rose the day after the presentation. However, over the longer term, Apple’s stock gained momentum: 60 days after 17 of the 24 product presentations, the stock showed gains, according to the analyst’s research.

— “I don’t expect stocks to react in any particularly significant way following the announcement [of the foldable iPhone],” Michael Howe, an ETF strategist for the YieldMax line at Tidal Financial Group, told CNBC. “That usually doesn’t happen.”

— The reason for the stock’s volatility could be not only the foldable iPhone, but also news about price increases and the introduction of AI, notes Paul Mix, head of technology research at Freedom Capital Markets. “What’s the deal with Apple’s AI?” CNBC quotes Mix as saying. “I’m not impressed by a very expensive foldable phone. Samsung has had one for years.”

— Laura Martin of Needham also expressed concern about the price of the rumored foldable phone, given the rising cost of memory, according to CNBC. “We are concerned about its price point and volume constraints, given rising memory prices and supply constraints related to advanced manufacturing processes,” she wrote in a note to clients. Martin believes that the stock’s upside potential will largely depend on comments from Apple CEO John Turnus regarding “products that will kick off a short-term iPhone replacement cycle.”

— “We estimate the additional memory costs at $100–150 per smartphone. Therefore, we expect Apple to raise prices by at least $100,” wrote HSBC analyst Nicolas Cot-Collisson on Tuesday. — “We believe the Apple brand has strong pricing power.”

— In a note released on Tuesday, investment bank MoffettNathanson analyzed the cost of materials for foldable phones and concluded that the device should cost around $2,500 each. “If we compare the cost of materials to the expected price of the iPhone Ultra—which is above $2,000–$2,500—we see that the iPhone Ultra will either slightly erode the standard iPhone profit margin of around 40%, if its price turns out to be at the lower end of the expected range, or it will drive profit margins higher if it costs $2,500,” CNBC quotes analyst Craig Moffett as saying. “That’s a price that’s approaching the cost of a base-model MacBook Pro.”

This article was AI-translated and verified by a human editor