Why Apple stock popped today

The iPhone maker has its eye on another revenue stream.

| More on:
A woman in colourful outfit holds up a phone to take a selfie.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Apple Inc (NASDAQ: AAPL) climbed higher on Wednesday, adding as much as 4.1%. At the end of the trading day, the stock was still up 3.8%.

The broader market indexes rallied, which no doubt contributed to the iPhone-maker's rise. However, news also broke that Apple was making a further push into the digital-advertising space, which could spell additional upside for the stock.

So what

As a result of its push to protect consumer privacy, Apple has been widely credited with the growing disarray for other companies in digital advertising. That said, it isn't above generating a new revenue stream in the ad-tech space.

Apple's entry into an adjacent field shouldn't be taken lightly, as it has the resources to establish a beachhead and a long history of building the necessary expertise from the ground up. It isn't yet clear if this step by Apple is intended to serve ads solely within the company's digital footprint, or if it has designs to expand beyond its own ecosystem. It could also signal the upcoming launch of an ad-supported version of its streaming-video platform, Apple TV+.

Recently, Netflix became one of the last holdouts to embrace a lower cost, ad-supported tier, leaving Apple as the only major subscription streaming service without one.

Specifically, Apple is looking to hire a senior manager to run a demand-side platform (DSP) in the company's advertising business, according to a report from Digiday. The job listing suggests that Apple is planning to design its own DSP. 

The successful applicant will be responsible to "drive the design of the most privacy-forward, sophisticated demand side platform possible," according to the report. Additionally, Apple is looking for a candidate with experience building a mobile-focused DSP and the experience necessary to optimize "mobile campaigns using measurement and attribution."

Apple is targeting a candidate with a minimum of eight years of technical experience and product management, as well as a proven track record of initiating "advertising-related products for audiences in the hundreds of millions."

Now what

Apple's services segment has been wildly successful, generating nearly $20 billion in revenue in its fiscal third quarter (ended June 25). The company now boasts more than 860 million paid subscribers. This move could open up a world of possibilities and take Apple stock to the next level.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Danny Vena has positions in Apple and Netflix. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Apple and Netflix. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on International Stock News

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

If you invested $10,000 in Nvidia stock the day ChatGPT came out, this is how much you'd have today

Buying Nvidia when the disruptive AI chatbot launched would have been a smart move.

Read more »

A Tesla car driving along a road at sunset
International Stock News

Why Tesla stock was climbing today

Investors were encouraged by news of a price hike on the Model Y.

Read more »

Plate with coloured wedges being parcelled out like a slice of pie representing a share split
International Stock News

Stock-split watch: Is Nvidia next?

Nvidia last split its stock when it traded for a pre-split $744 in 2021.

Read more »

A woman in jeans and a casual jumper leans on her car and looks seriously at her mobile phone while her vehicle is charged at an electic vehicle recharging station.
International Stock News

1 Wall Street analyst thinks Tesla stock is going to $125. Is it a sell?

Tesla is no longer a magnificent stock, according to a Wells Fargo analyst.

Read more »

A young man goes over his finances and investment portfolio at home.
International Stock News

Is Nvidia stock a buy?

The company's stock could rise 40% over the next two years and outperform the S&P 500.

Read more »

Man with hands in the middle of two items with money bags on them.
International Stock News

Is Nvidia headed for a stock split?

Nvidia stock has split five previous times in the company's history.

Read more »

Digital rocket on a laptop.
International Stock News

Nvidia shares surged (again) today. Is it too late to buy the red-hot artificial intelligence (AI) growth stock?

Nvidia stock has gained nearly 300% over the past year. Can investors still profit from this AI stock?

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Can you buy Nvidia shares on the ASX?

This stock has rocketed higher. How do we get access to it?

Read more »