CNBC’s Jim Cramer is optimistic about Apple’s business in China, noting stronger monthly App Store numbers that reflect increased activity in the country. Cramer reacted to data from Morgan Stanley showing a mild acceleration of overall App Store growth in May to 11.7% year over year, calling it “very bullish.” The analysts at Morgan Stanley also stated that their tracker results indicate 10% growth quarter to date and a 90 basis point upside to their forecast for Apple services in the June quarter.
As Apple’s services business sees more growth from China, Cramer believes the “bull case of China being back” is becoming more valid. Apple recently reported record quarterly revenue from high-margin services and projected double-digit growth for the June quarter, leading to a 10% increase in the struggling stock since its post-earnings surge. While shares were trading nearly flat year to date, slower iPhone sales in China have posed a challenge for the company.
However, Apple’s recent quarter saw better-than-expected sales in China, prompting the Investing Club to raise its price target on the stock from $205 to $220 per share. An upcoming potential catalyst for Apple stock could be the Worldwide Developers Conference next month, where the company is expected to share more about its artificial intelligence strategy. The incorporation of AI features into the iPhone could drive a strong device refresh cycle, as reported by the Club in a Monday commentary.