CUPERTINO -- After a two-month slide, Apple (AAPL) stock bounced back with a bang Monday, jumping more than 7 percent higher and pulling the company's market capitalization higher than $500 billion just days after it fell below that vaunted level.
Shares in the most valuable U.S. company closed Monday at $565.73, a daily gain of $38.05, or 7.2 percent, a gain that was in concert with a large leap for the major U.S. stock indexes, which had struggled the previous two weeks.
Apple stock suffered after the Sept. 21 launch of the iPhone 5, with an executive shake-up, production problems and declining tablet market share contributing to a sell-off of Apple shares that sent the stock into "bear market" territory, defined as a drop of 20 percent or more in a two-month span.
The fall took Apple out of the $500 billion club Thursday, after the Cupertino company became just the sixth company to record a market capitalization -- the total value of all shares in a company -- higher than that level. Apple's market cap stayed higher than $500 billion for nearly six months, and easily eclipsed the mark again with Monday's gain, with Apple's valuation closing at $532.2 billion.
Many experts posited that large Apple shareholders had been selling on the expectation that capital gains taxes would be increased next year, with the increased supply and fallen demand pushing the share price down. Topeka Capital Markets analyst Brian White checked in with a note Monday morning that said the elongated sell-off was "insanely insane."
"Those investors that have missed Apple or have been underweight on the stock now have another opportunity to buy Apple before sentiment takes a turn for the positive during what has historically been the strongest quarter of the year for the stock," White wrote.
Investors may have taken his words to bear and bought into the stock, and shareholders who sold stock at a much higher price probably saw a strong entry point to jump back into the market for Apple shares.
Nobody is as high on the Cupertino company's growth prospects as White, however: He has the highest recorded price target for Apple shares at $1,111. Out of 54 analysts MarketWatch tracks, the average price target -- the price at which an analysts believes an investor should sell shares for maximum return -- is $774.44.
A more consensus view was expressed Monday by Merrill Lynch analyst Scott Craig: He dropped his price target to near the average level, from $840 to $780 but noted that the recent volatility should not drive away investors.
"We remain positive on current product cycles and believe the stock offers a very attractive balance of growth and value," he wrote.
Apple still has a long way to rise in order to meet the highs seen this summer: Even with Monday's rise, the price is down 19.8 percent from the top price ever paid for Apple stock, $705.07, reached on the day the iPhone 5 was launched, Sept. 21.
Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.