Apple Shares (NASDAQ:AAPL): Fintech Push Comes at an Convenient Time
Apple (NASDAQ:AAPL) shares has made headlines for launching a savings account that has a competitive interest rate of 4.15%. Undoubtedly, the latest product offering from Apple’s fintech push comes at a pretty exciting time, at least through the eyes of a potential market disruptor. As Apple wanders deeper into financial services with its disruptor hat on, it’s hard to be anything but bullish on the company.
US regional banks are feeling the pressure. Apple may see an opportunity
The American banks have been under heavy selling pressure for well over a month now. It all actually started with SVB Financial’s failure. As other regions buckled under the weight of the Fed’s rate hikes, a full-fledged US regional banking crisis ensued. Bad bond investments eroded depositor confidence, eventually paving the way for a bank run.
It is difficult to say when this pressure which damages the regional banks will be limited. In the space of a month and a half, we have witnessed the second, third and fourth largest bank failures in US history. After such a wave of failures, it’s no mystery why some depositors are feeling a little on edge. While major U.S. banks have largely held steady in this storm, they could also stand to lose a little as depositors look for alternatives.
Of course, there have always been fintech firms, neobanks and smaller financial institutions that have offered very competitive rates on deposits. That said, never before has a respected, consumer-centric behemoth of a company like Apple entered the financial sector. Apple is a $2.65 trillion company that many tech-savvy users already trust day-to-day with their data. For many Apple users, this trust has been built for well over a decade.
When it comes to financial services, trust and reliability play a huge role in where depositors or investors choose to take their business. Of course, competitive prices always help, but they are not always the deciding factor. As Apple pulls the curtain on its high-interest savings account, I think the firm can stand to win a lot of business as confidence in banks takes a modest hit with each regional bank failure.
Apple and Goldman may continue to make moves in Consumer Banking
Apple may be a relative newcomer to the financial services space, but it has all the tools it needs to thrive. With a little help from Goldman Sachs (NYSE:GS), I believe that Apple is the only company that can upgrade the financial industry as we know it. Undoubtedly, banking can be profitable, but it can also be violently turbulent when the tide turns. When Apple merges with Goldman (and perhaps other banks in the future), the firm may find itself with the opportunity to enjoy more of the financial services party minus the potential indigestion.
At this point, many depositors may be inclined to take money out of these sub-2% savings accounts and store it with Apple, where they can earn more than double the interest.
Reportedly, 69% of Apple cardholders expressed interest in opening a savings account. Younger consumers, especially those in the Millennial and Gen Z cohorts, may be inclined to get an Apple card if it means getting surplus to such a competitive savings account.
According to a report conducted by Forbes, Apple’s high-yield savings account garnered nearly $1 billion worth of deposits in just four days. That is impressive.
Apple has a competitive price, a reputation built on decades of trust, and a brand that is virtually impossible to match. It’s no mystery why Apple’s foray into banking has been met with so much early success.
Is AAPL stock a buy, according to analysts?
As for Wall Street, AAPL stock comes in as a strong buy. Out of 25 analyst ratings, there are 21 buy, three hold and one sell recommendation. The average Apple price target is $177.23, implying an upside potential of 5.8%. Analysts’ price targets range from a low of $120.00 per share to a high of $205.00 per share.
The Bottom Line on Apple Stock and the Fintech Push
Apple has always been about doing things better than the competition they are trying to go up against. As select banks face a crisis of confidence, I’ll be looking for more to take their money to Apple, not just for higher interest rates, but for greater convenience and security.
Going into earnings, I’ll be looking for more details on Apple’s fintech push. Even if the quarterly results don’t impress, comments about Apple’s direction could be a needle puller for the stock.
Mediation
