Since bottoming in January, shares of Apple (AAPL) are higher by 6% over the past month. This rally is facilitated in part by a strong fourth-quarter earnings report. In particular, the company posted stronger-than-expected iPhone sales.
Apple also appeared to calm investor concerns regarding the company’s artificial intelligence (AI) plans. Combine that with iPhone strength and there are pathways for the stock to rally more this year, potentially generating opportunity with the Direxion Daily AAPL Bull 2X Shares (AAPU) in the process.
AAPU is designed to deliver 200% of the daily performance of Apple shares. As a leveraged ETF, it’s best used by tactical short-term traders that move in and out of positions in a day or a few days. With that disclaimer out of the way, it’s worth examining AAPU’s potential utility over the remainder of this year.
Assessing AAPU Angles
As noted above, iPhone shipments were a catalyst for Apple in the fourth quarter. AAPU traders should keep an eye on that metric over the course of 2026.
“Morningstar now expects iPhone revenue growth in the low teens in 2026, up from high single digits. Over the long term, however, the firm continues to model mid-single-digit growth as smartphone innovation becomes more incremental,” noted analyst Ananya Chag.
Apple is expected to deliver impressive gross margin expansion this year, which it did in the fourth quarter. That is to say profitability is likely to rise, potentially providing catalysts for AAPU.
“Morningstar now projects Apple will reach a 50% gross margin within two years, up from 38% in 2020, as higher-margin services make up a larger share of sales and Apple continues designing more of its own chips, helping lower hardware costs and reduce reliance on outside suppliers,” added Chag.
Another potential spark for occasional use of AAPU this year is more clarity around Apple’s AI plans. Those efforts include a partnership with Google’s Gemini. This suggests Apple wants to expand its AI footprint, but in a pragmatic way that benefits investors.
“Apple’s artificial intelligence strategy remains a focus for investors, particularly after the company confirmed that its next-generation Apple Intelligence features and revamped Siri assistant will be built on Google’s Gemini models,” concluded Morningstar’s Chag. “By anchoring Gemini within its own ecosystem and running models through Apple-controlled infrastructure, the company preserves its privacy-focused value proposition.”
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