This article was originally published on TipRanks.com
Apple (Nasdaq:AAPL) secretly signed an agreement worth more than $275 billion with Chinese officials. Citing a report on The Information, Reuters reports the deal has gone on to protect the iPhone maker from threats and regulatory crackdowns in one of its most important markets. AAPL shares rose 3.54% to close at $171.18 on December 7.
Apple is a U.S. company that designs, manufactures, and sells smartphones, personal computers, tablets, wearables, and accessories. It also offers a range of related services.
Apple’s China Deal
Citing interviews and internal Apple documents, The Information alleges that Apple CEO Tim Cook forged a five-year agreement with Chinese officials. The agreement was inked after a series of in-person visits to China as part of an effort to fend off any regulatory crackdown targeted toward the tech giant.
The signing of the five-year agreement came on Chinese officials remaining confident that Apple’s investment will go a long way in developing China’s economy. Through the deal, Apple promised to assist in developing China’s economy and technological prowess, via a combination of worker training, business deals, and investments.
Prior to the signing of the $275 billion deal, there were concerns in China that Apple was not contributing enough to the local economy. A government crackdown and bad publicity had led to iPhone sales plunging significantly.
On Monday, Bernstein analyst Toni Sacconaghi reiterated a Hold rating on Apple and a $132 price target, implying 22.89% downside potential to current levels. The analyst remains confident about Apple’s push around augmented reality, use and application of which is expected to increase.
Consensus among analysts is a Strong Buy based on 22 Buys, 5 Holds, and 1 Sell. The average Apple price target of $169.28 implies 1.11% downside potential to current levels.
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