Apple Inc (AAPL - Free Report) announced that it will be investing $200 million in Corning Inc (GLW - Free Report) to help create better products.
Earlier this month, in an interview with CNBC, CEO Tim Cook had mentioned that the company is setting up Advanced Manufacturing Fund of $1 billion to endorse manufacturing jobs in the U.S. Investment in Corning is the first one made by Apple from this fund.
Per Tech Crunch, Corning was a “logical first choice”, given venerable collaboration of the two companies. Notably, Gorilla Glass, a staple in every smartphone nowadays, was an outcome of the Apple-Corning collaboration, the report further adds.
Apple’s COO Jeff Williams was quoted saying, “This partnership started 10 years ago with the very first iPhone, and today every customer that buys an iPhone or iPad anywhere in the world touches glass that was developed in America. We’re extremely proud of our collaboration over the years and we are investing further with Corning who has such a rich legacy of innovative manufacturing practices.” The two companies have created over 1000 jobs in the U.S over the last 10 years, spanning across manufacturing, commercial and research & development areas.
Apple has been subject to intense scrutiny by Donald Trump regarding the “manufacturing” issue.
Throughout his campaign, Trump had opposed Apple’s decision to manufacture goods overseas and even promised that he will urge the company to bring manufacturing jobs back to the country. Trump was quoted speaking to The New York Times in Nov 2016, "One of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States, where instead of going to China, and going to Vietnam, and going to the places that you go to, you’re making your product right here."
In fact, to alleviate Apple’s concern of elevated prices of finished products, Trump told Cook that he will provide huge tax cuts to tech companies. Cook added that the lowering of tax will aid repatriation of cash, which, in turn, will be used to boost capital allocation plans.
On its part, at its annual shareholders' meet earlier in March, Apple had mentioned spending over $50 billion on suppliers toward manufacturing in the U.S. Cook further added that Apple has created around 2 million jobs in the country, including manufacturing jobs. Cook was quoted by media reports saying, "We're always looking for more ways to help our country. We know that Apple can only exist in the U.S.” He added that nearly 70% the company's workforce is in the U.S.
Meanwhile, reportedly in a separate development, Apple has acquired Lattice, a startup specializing in artificial intelligence technology, for $200 million. All the 20 Lattice engineers have been “absorbed” into Apple’ operations, per media reports.
Zacks Rank & Share Price Movement
At present, Apple carries a Zacks Rank #3 (Hold). Given the phenomenal performance of its iPhone 7 and 7 Plus, Apple’s shares have outperformed the broader market in the last six months. Over the past one year, shares of Apple have registered growth of 41.94% compared with the Zacks Computer Mini industry’s gain of 40.55%.
Stocks to Consider
A couple of better-ranked stocks in the wider technology space include Paylocity Holding Corp (PCTY - Free Report) and Alphabet Inc (GOOGL - Free Report) . Paylocity sports a Zacks Rank #1 (Strong Buy), while Alphabet carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the trailing four quarters, Paylocity and Alphabet have yielded positive average earnings surprises of 66.97% and 5.74%, respectively.
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