By TheresePoletti – Columnist
Most investors weren’t expecting huge news from Apple Inc.’s software-focused developers conference Monday, but those hoping for glints of news that would significantly push the company’s shares toward surpassing a $1 trillion market cap may have been disappointed.
Apple’s AAPL, +1.02% stock jumped 1.7% in intraday trading on Monday as its Worldwide Developers Conference keynote was going on, but ended the day closing up just 0.3%. While that was counter to its usual declines during past WWDCs, it wasn’t enough a big enough jump to get it much closer to a record market cap.
On Friday, Apple was about $7-a-share away from being the first U.S. company to reach $1 trillion in market cap, based on its fiscal second-quarter outstanding shares count of 5.068 billion, according to BTIG analyst Walter Piecyk.
“Given Apple’s close proximity to a $1 trillion market capitalization, the focus on the stock performance following WWDC might be in greater focus,” Piecyk wrote early Monday.
Chief Executive Tim Cook kicked off Apple’s WWDC with new augmented-reality development tools for its mobile operating system, iOS, in an area he has said is extremely important for Apple’s future. Apple’s new ARKit 2 will help software developers more easily add augmented-reality features into their iPhone apps.
“It will definitely enable some cool multiplayer gaming experiences, and will drive awareness for AR,” said Thomas Husson, a Forrester Research analyst.
Apple also announced software upgrades for all its products, including a new MacOS called Mojave; a new WatchOS 5 for the Apple Watch, including features that track a user’s workouts and walkie-talkie capability; and plans for its iOS12 mobile operating system with personalized emojis. Siri, Apple’s often problematic voice assistant, will now offer shortcuts that users can create, and suggestions based on daily habits.
The AR news and other updates that Apple announced had, for the most part, been expected by investors. The biggest surprise of the day was news that Apple’s newest Safari browser feature will now block sites like Google GOOG, +0.43% and Facebook FB, +0.48% from tracking consumer activity via sharing buttons.
That could potentially have some negative impact. If users who want to share or like things on Facebook find it harder to use on Apple products, they may switch devices or browsers. Conversely, the move could also have an impact on Facebook or Google’s ad revenue, if their sites are unable to serve targeted ads to users.
Apple did not give any actual hardware news, as is usual at WWDC, but the company typically launches new hardware in the fall, which is when investors are expecting a new iPhone. And that’s what investors clearly remain focused on, as well as Apple’s own share buyback program, which will reduce its number of shares outstanding.
“Now all eyes are on the trifecta of a major iPhone product cycle for second-half 2018, the recently upped buyback program and a multiple re-rating that we believe will move shares toward the $200 range/trillion-dollar mark over the coming months,” said Daniel Ives, head of technology research at GBH Insights, in a note to clients.
So even with a flat global smartphone market and its faster-growing services businesses, investors are back to waiting for the next iPhone. If and when Apple hits the trillion-dollar market cap, it’s likely going to be based on some news related to the iPhone, and not much else.