A bullish update from Apple lifted shares in its European suppliers for the second time in a week on Friday, as strong demand for its new products put it on track to report a fresh record profit.
Apple beat sales forecasts over the three months to September, and pointed to a stronger than expected end to the year in an update after markets closed on Thursday.
The news followed a similarly positive update at the end of last week, when pre-orders for Apple’s new iPhone quickly outpaced supply and boosted shares in the companies that make its components.
Shares in Asian suppliers climbed overnight, and Austria’s AMS rose a further 2 per cent in early trading on Friday. AMS’ stock is now up almost 30 per cent over the last month. STMicroelectronics climbed 1.5 per cent, bringing its monthly gain to 22 per cent.
The biggest beneficiary on the day was Dialog Semiconductor, which rose 3 per cent. However, while Dialog’s stock has risen 15 per cent over the last month, it has yet to recover to the levels seen earlier in the year, before worries surfaced that Apple would drop the supplier.
Dialog manufactures power-management chips for Apple, but shares in the Anglo-German group tumbled in April when analysts suggested Apple may start producing its own chips in-house.
While this week’s share price gains have shown the potential benefits of supplying the world’s largest public company, Dialog’s travails highlight the risks of being so exposed to a single company.
When Apple announced that it would phase out use of technology from the UK’s Imagination Technologies, for example, shares in the company collapsed and it was forced to put itself up for sale. In September it agreed a sale to Chinese private equity firm Canyon Bridge worth £550m, barely a quarter the value of its 2012 peak.
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