Since posting stellar earnings last week, not to mention the announcement of a widely-expanded capital return program, shares of Apple have been on the rise in a major way. During the last three trading days alone, Apple shares have increased by $76.21, which amounts to a rather sizeable 15.6% bump.
Notably, Apple shares after the closing bell on Monday crossed the $600 barrier for the first time in approximately 18 months, hitting a 52-week high in the process. Indeed, the last time shares of Apple saw $600 was back in October of 2012.
It's hard to pinpoint just what exactly is driving the surge in stock price given that there are a number of variables at play. First and foremost, Apple's revenue last quarter exceeded the consensus on Wall Street by a whopping $2 billion. For a company that analysts seemingly love to peg as a has-been whose products are continually being commoditized, that's an incredible "beat" from Apple.
What's more, Apple also announced an expanded capital return program that left investors extremely pleased. In addition to increasing its dividend payout to $3.29 (an 8% bump), Apple also said that it would expand its stock buyback program. And oh yes, Apple, on top of all that, also announced a 7-1 stock split scheduled to go into effect next month.
While splitting a stock does nothing to change its fundamental value, it does make the stock "appear" to be a better value, not to mention more affordable for smaller investors. Imagine, for example, a small investor with $1000 to spend. As it stands today, this investor would only be able to afford a single Apple share. With a 7-1 split, however, our friendly investor would be able to purchase 11 shares.
Looking ahead, it'll be interesting to see how shares of Apple perform given that Tim Cook has assured the Apple faithful that new product categories are looming. As a final point of interest, note that Apple's all-time high was $702 which the stock reached back in September of 2012.