Apple (AAPL - Free Report) stock jumped to new all-time highs on Tuesday after the firm officially announced on Monday that it would start to ship Macs with its own custom-designed chips. The move is part of Apple’s broader push to transition away from third-party components.
Apple and CEO Tim Cook said on Monday at the first day of its Worldwide Developers Conference that it would phase out its 15-year partnership with Intel (INTC - Free Report) over the next several years for its MacBooks and Mac desktops. AAPL’s custom silicon chips will help improve battery life, performance, and more because of stronger integration between hardware and software.
Apple has already made custom chips for iPhones, iPads, and the Apple Watch that help cut costs and boost performance. The firm released its first iPhone processor all the way back 2010, and it now reportedly makes roughly 40% of the core components in its flagship smartphones, up from 8% just under five years ago.
The technology giant believes its ability to replace third-party components will help it better compete over the long run. “When we make bold changes, it’s for one simple yet powerful reason: so we can make much better products,” Cook said during a video Monday. “When we look ahead, we envision some amazing new products, and transitioning to our own custom silicon is what will enable us to bring them to life.”
Wall Street was clearly excited about Apple’s now complete commitment to in-house processors. The firm also showcased some upcoming software updates, which includes sleep tracking on the Apple Watch, automatic app organization, and more.
AAPL stock jumped another 2% on Tuesday to new all-time highs of $366.53 per share. The climb was part of a broader push from big-tech that included Amazon (AMZN - Free Report) , Spotify (SPOT - Free Report) , Microsoft (MSFT - Free Report) , and others that helped the Nasdaq Composite hit new all-time highs.
Apple, which is now up 63% since March 23, could be due for a near-term pullback. Yet, longer-term investors might want to think about buying the $1.6 trillion titan for its in-house silicon expansion, services boom, its massive pile of cash, and much more.
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