Is Apple's Stock Peaking?

The quarter was a blow-out success. Revenue rose 20% to $5.26 billion, and gross margins hit 35%. The company said, however, that these margins could not be sustained. NAND flash and memory product costs are going to rise.

Apple (AAPL) sold 10.5 million iPods and 1.5 million Macs as the growth of those product continues to amaze.

But, the stock market reaction to the news was actually fairly muted. Apple’s shares rose about 6% after hours to a little over $101. The company’s shares traded at over $98 after the last earnings announcement early in January. Contrast that to the 25% rise in Amazon’s (AMZN) stock after its earnings release.

According to Thomson, the mean price target among analysts for Apple’s stock is $115. The highest target is $145. But, in the face of a great quarter, the stock barely broke $100.

The market’s hidden concerns about Apple are based on a number of things. One is that it is unclear whether Steve Jobs is entirely clear of the company’s options mess. Another is that even as iPod sales rise, the rate of growth for the multimedia player is slowing. And, skeptics think a $500 iPhone cannot sell well when cell service providers are giving phones way to consumers who sign up for service plans.

Apple at $100 looks good on a chart, but it is really not much above where it traded in January, and the company still has questions to answer.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.