This despite:
- In early January, Apple CEO Steve Jobs said he had a relatively minor health problem.
- A week later, he said it was more serious than he thought the week before, and would be taking six months off. Bloomberg reported that he was mulling a liver transplant.
- The Macworld Expo was a snoozefest, offering little excitement for Apple's next few months.
- Palm announced the Pre, what's arguably the best competitor yet for Apple's iPhone -- which itself didn't sell as well as anticipated over the holidays.
So why the rally?
Despite some short-term setbacks, we think it's a sign that investors believe Apple is one of the strongest technology companies in the world, with a good chance to keep outgrowing its rivals -- as it's done the last several years.
Apples growth is certainly slowing -- the iPod and Mac are not the growth drivers they were a year ago. And the iPhone is getting more serious competition.
But we think investors have some good things to look forward to. Last quarter's results are one piece of evidence. Rumors that Apple will start selling portable tablet devices later this year suggest that Apple will be able to better compete against the cheap, relatively crappy "netbook" computers that PC makers like Acer and Asus are selling like hotcakes. The supposed iPhone product roadmap could open the device to a broader audience. And a new iMac and Mac mini could give desktop Mac sales a much-needed lift.
There's still a lot of questions about consumer spending, the economy, unemployment, patents, and executives that could affect Apple. If Steve Jobs doesn't come back in June, that would be bad for Apple long-term. (And could easily jolt Apple's stock.)
But overall, we think Apple's recent rally makes sense -- and wouldn't be surprised to see it continue.
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