Apple stock ran up on Friday, reported earnings after the close that beat expectations, and then the stock fell in after market trading. It came back some on Monday. I won't try to repeat the details of price changes and earnings reports as these are well covered elsewhere.
Much of the coverage of Apple tried to explain the post-report stock price drop as caused by something diappointing in the press release. iPad volumes were light, gross margins were a little low, and the fiscal Q1 quarter guidance was below current expectations.These factors do not explain the stock drop. Overall, the quarter was at or above most expectations, and so the few shortfalls were more than offset by the stronger areas. Apple has a habit of low-balling its guidance and then miracously beating it. So the Q1 guidance was not a believable explanation.
I think the real explanation for the stock weakness lies in investor psychology and has little to do with what Apple reported. Investors simply played a game of buying the stock before the earnings report.
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