Apple Inc shares rose more than 7 per cent on Thursday a day after it announced stronger than expected financial results and solid outlook for the current quarter despite the weak economy.
Its shares rose $6.31 to $89.14 in brisk morning trade on Nasdaq as investors showed relief that demand for Apple products appeared to be holding up. While it sold fewer iPhones than expected, iPod sales beat analyst estimates.
Apple's results came the night before Microsoft surprised Wall Street with a disappointing profit and said it would cut 5,000 jobs.
Apple's results also contrasted sharply to consumer electronics rivals LG Electronics and Sony Corp, which posted big losses due to a slump in consumer demand for gadgets.
Needham analyst Charlie Wolf said Apple results were strong even as he cut his price target for the stock to $200 from $240 and said it was clear the company was not immune to the recession.
"But with the diversity of revenue streams Apple has created in the past five years, including the iPod, the iTunes Store and most recently, the iPhone, the fundamentals of the company continue to be strong," Wolf said in a research note.
{{/usCountry}}"But with the diversity of revenue streams Apple has created in the past five years, including the iPod, the iTunes Store and most recently, the iPhone, the fundamentals of the company continue to be strong," Wolf said in a research note.
{{/usCountry}}Bernstein analyst Toni Sacconaghi said in a research note that Apple's forecast implied second-quarter growth in a range of 1 percent to 6.5 per cent.
"We believe this suggests the company either enjoyed a strong start in January or has imminent plans for new product introductions," he said.
But even after Thursday's move, Apple shares were still off almost 55 percent from the start of 2008.
Investors have been worried about the health of its Chief Executive Steve Jobs and the company's dependence on consumer appetite for high-end gadgets in a weak economy.