On Monday, Apple Inc. (NASDAQ:AAPL) shares surged more than 3% after announcing the purchase of the classical music app, Primephonic. The iPhone maker wants to expand its Apple musing offering by launching a classical Apple Music app that will give subscribers access to curated playlists and exclusive audio.
Apple’s vice president of Apple Music and Beats Oliver Schusser heaped praise on the acquisition citing how the app has become a favorite of classical music enthusiasts.
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Schusser added:
Together, we’re bringing great new classical features to Apple Music, and in the near future, we’ll deliver a dedicated classical experience that will truly be the best in the world.
In other news, investors also reacted positively to reports that iPhone sales could increase by 14% in 2021, with the overall industry experiencing about 7.4% growth at the back of last year’s pandemic-stunted shipments.
Although Apple Music is not among the largest income generators in Apple’s revenue mix, it plays a crucial role in the giant technology company’s service revenue growth. In the most recent quarter, Apple reported service revenue of $17.5 billion, up 33% on a year-over-year basis.
The iPhone maker continues to grow its service revenue in a bid to diversify its business amid slowing core business. Furthermore, the streaming industry is one of the most exciting places to invest. Thus, Apple Music gives Apple access to an industry that could generate consistent cash flows in a few years.
From a valuation perspective, Apple shares trade at a reasonable P/E ratio of 29.10 and a forward P/E of 26.23, making the stock attractive to value investors. Moreover, analysts expect earnings to grow at an annual rate of about 20% over the next five years.
Therefore, growth investors could also find the AAPL stock attractive at current valuation multiples.
Technically, Apple shares oscillated above and below the $146.00 level since July, making it a crucial price zone. As a result, shares spiked off the support level to surge above $153, following Monday’s events.
However, the stock is yet to cross to overbought conditions, meaning the current bull-run could continue further. Therefore, investors can target profits at approximately $159.98 or higher at $166.83. On the other hand, $146.62 and $140.18 provide critical support.
In summary, Apple shares seem to be enjoying a solid bull-run in an ascending channel formation. However, although the stock price spiked more than 3% on Monday, it is yet to cross to overbought conditions.
Moreover, Apple’s long-term growth prospects look promising, making it a compelling investment to growth investors. As a result, now could be a good time to buy.
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