Apple Inc. AAPL, +0.17% Apple Inc.’s stock is up more than 7% over the past three weeks.
The stock’s rise comes amid a broader rally in the stock price.
But investors aren’t getting any relief from the lack of a tax reform bill.
Apple’s stock is in the midst of a rally after the Trump administration signed a tax bill into law that will allow businesses to deduct profits from taxes.
It was one of the key factors in the company’s success, according to analysts.
“Apple’s tax break is a key reason for the rally,” said Benjamin Tal, senior portfolio manager at First Point Advisors.
“The new tax relief will make it easier for people to invest and drive demand for the company.”
Companies with high earnings are benefiting from the tax relief, Tal said.
Apple is one of those companies, as well as Amazon.com Inc. AMZN, +1.27% and Microsoft Corp. MSFT, +2.12% Tal also pointed to Amazon’s move to lower its quarterly earnings forecast.
The company’s shares were down more than 10% in after-hours trading Thursday, compared with the S&P 500’s gain of 4%.
For companies like Apple and Amazon, the tax bill helps them create more jobs, Tal added.
The tax cuts also have ripple effects for investors.
Companies that hire more workers, for example, pay more taxes.
While investors have been clamoring for tax relief in recent weeks, the latest tax bill may make the situation worse, said Robert Bresnahan, chief investment officer at Bresner Asset Management.
Investors also will be more hesitant to buy stocks when they are under pressure, Bresnick said.
“That’s going to drive prices down.”
The tax bill will provide a significant tax relief for businesses and individuals, but it also will reduce taxes for some people, according, Tal.
The Tax Policy Center, a Washington-based think tank, has estimated that the tax reform would result in a $1.5 trillion benefit to the federal government in 2021.
That’s more than the value of the combined value of state and local tax breaks.
That’s a big, big deal for Apple, which has a $14 billion market cap.
For Amazon, which generates about $7 billion in annual sales, the amount is less than the revenue it receives from advertising.
In the next six years, the bill would reduce taxes on corporations by about $1 trillion, according Bresnik.
But that’s just the beginning.
For individual taxpayers, the benefits would be much larger.