A summer belonging to "lao deng"? As storage plummets, Apple hits a new high!

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While most hot AI technology stocks are under pressure, Apple has bucked the trend and reached a new all-time high.

Apple's stock rose 4% on Wednesday, closing at $327.50 and setting a historic closing high. The Dow Jones as a whole gained only 0.3% that day, with Apple being the strongest performing component.

Driving this surge was the latest news: On July 15, China's Cyberspace Administration released a new batch of generative AI service filings for mobile devices. Seven AI products were approved, including Apple “Apple Intelligence,” Huawei's Xiaoyi large model, OPPO AndesGPT, and Nubia Doughnut Phone large model. This means Apple Intelligence—Apple’s core AI software—has officially been cleared to enter the world’s largest smartphone market.

Evercore ISI analyst Amit Daryanani directly characterized this as: "Today's approval is a major win for Apple; it opens the door for Apple Intelligence to launch in the largest smartphone market and supports the company’s upcoming Siri AI release cycle." He maintained an "outperform" rating for Apple, with a target price of $365.

Meanwhile, overnight, the AI storage sector broadly dropped, with Micron and SanDisk plunging 8%.

High Valuation Before Earnings: Underpinning or Pressure?

Behind the record high, Apple's valuation has become quite stretched.

According to Dow Jones market data, Apple's current forward P/E ratio is 34.6x, higher than its 5-year average of 27.7x, and the highest since September 2020 (when it was 35.3x).

Simply put: If a company’s stock price rises much faster than earnings expectations, the market is essentially paying in advance for “future good news.” If the good news isn’t good enough, the stock price is prone to pull back.

According to Barron's, this is why "Wall Street will have zero patience for any result short of a major earnings beat."

Apple will release its third-quarter earnings after the US market closes on July 30. The biggest concerns for investors right now include: margin pressures caused by rising memory costs, whether iPhone demand is weakening, and declining consumer purchasing power under inflation.

An Exception During Tech Stock Volatility

This round of tech stock trading has been far from calm. Sectors such as storage chips are under pressure, and concerns over the overall volatility of tech stocks persist.

Against this backdrop, Apple’s record high stands out. Amid tech stock fluctuations, Apple’s all-time high closing on Wednesday brings some comfort to investors.

But the comfort is fleeting. The July 30 earnings report is the real stress test—high valuations mean the market has already priced in fairly optimistic expectations. Any guidance that falls short could put Apple’s rally to the test.

Risk Warning and DisclaimerThe market comes with risks; investment should be cautious. This article does not constitute personal investment advice, nor does it consider the individual investment objectives, financial situation, or needs of any user. Users should consider whether any views, opinions, or conclusions in this article fit their particular circumstances. Investments made accordingly are at your own risk. ```