Jim Cramer breaks down how Apple's subscription model is making the stock even more enticing.
"Mad Money"
Apple reported that iPhone sales, historically its largest source of revenue, plunged 17% year over year. It said that trend could continue, but that didn't stop the stock's Wednesday rally. Shares of the iPhone maker gained $9.85 during the session, closing above $210. "The stock caught fire today because it's become impossible to deny the power of that metamorphosis," Cramer said. "When I say this is a paradigm shift, what I mean is that, within two years, this subscriber base will profoundly define the way we judge the stock of Apple. We're already well on our way to a world where the key metric is subs, not iPhone sales."
Over the years, its services revenue kept growing and leadership decided to embrace the segment. In January, Apple preannounced some bad news to get ahead of the curve and revealed that they would stop disclosing the amount of units it sells each quarter, which many saw as a terrible move, Cramer said.
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