aapl july

At the time of this writing, Apple’s stock is hovering around $456 per share. While that’s still painfully lower than its peak of $702 back in September of last year, it’s a major improvement over the $398 per share low it hit last month. So what happened?

The truth is, APPL had a nice little July. After starting the month at $405, the stock spiked around the 23rd—the day it announced its ‘disappointing’ Q3 earnings—and has been on the rise since. But why? Are investors gaining confidence in Apple again?

For a little more context, iPhone sales in Q3 smashed Wall Street expectations—31.2 million vs. 27 million—but most other numbers were lower than investors would’ve liked. iPad sales were low, Mac sales were low, and overall growth was non-existent.

Apple store opening in Hong Kong

What I think happened though, or is happening, is that investors are starting get a little bit of their faith in the Cupertino company back. And I think this for a few reasons. For one, while Apple’s last quarter wasn’t a blockbuster, it also wasn’t a complete failure.

Because without a major product launch in 2013, and a handset and tablet nearing the end of their refresh cycles, Apple still managed to sell 30 million iPhones. It still managed to have a $30 billion quarter, and it still managed to add $7 billion to its cash pile.

That’s impressive. It shows sustainability, and it shows that Apple doesn’t need a new hit product every quarter in order to make money—a lot of money. These are things investors have been concerned about as the iPhone/iPad competition continues to heat up.

Budget iPhone (NowhereElse 001, blue)

But don’t worry though, the new products are coming. And this is the second reason why I think Apple’s stock is on the rise. Tim Cook has repeatedly said “Apple has amazing new hardware, software, and services coming this fall.” And the evidence backs that up.

Over the past few months, we’ve seen a number of leaks indicating things we might see in Q4 of this year. There’s been evidence of a redesigned iPad 5, an iPad mini with Retina display, a ‘budget iPhone,’ and a new flagship iPhone with a built-in fingerprint sensor.

And it’s those last two things that investors are really keeping an eye on, particularly the budget iPhone. Apple has very little marketshare in places where prepaid users outnumber contract users—China, India, etc. And a cheaper iPhone would quickly change that.

Add to that the frequent iWatch and iTV rumors, and the interesting things Apple is doing with vehicle integration, and you can see why folks on Wall Street are starting to get back on the Cupertino bandwagon. The $1M question is, how long will they stay on this time?

What’s your take on all of this?