A year ago, many investors had given up on Apple, whose stock price had fallen more than 30 per cent from its 2015 peak. Apple's once-unstoppable growth had come to a crashing halt: the number of iPhones sold was down 13 per cent, and the company posted its first revenue decline in 13 years.

Today, Apple's business remains sluggish, but that hasn't stopped investors, including the famously tech-averse Warren Buffett, from falling in love with it again. Shares of the tech giant - the most valuable company in the United States by market value - have repeatedly hit new highs this year. On Friday, they closed at $US143.65, up nearly 60 per cent from last May's trough.

What's driving the stock, say sceptics and fans alike, is hope - hope that the new iPhones due in September, after the 10th anniversary of the original iPhone's introduction, will be dazzling enough to inspire existing iPhone users to upgrade and prompt others to switch from Android phones made by Samsung, Huawei and other manufacturers.

"Everyone expects Apple to cure cancer with their next product launch," said Kevin Landis, chief executive of Firsthand Funds, who has managed tech-focused mutual funds through many ups and downs.

Investors will get more data about Apple's performance, and perhaps some clues about its future, on Tuesday, when the company reports its results for the financial quarter that ended in March. Analysts expect the company to report a slight increase in iPhone sales and overall revenue.

Apple declined to comment ahead of its earnings report.

Mr Landis sold most of Firsthand's Apple position near last year's bottom, but he said he had no regrets despite the stock's recent gains. He expects Apple to continue churning out incremental improvements rather than shake up the industry. The biggest change in last fall's iPhone 7, he noted, was the elimination of the headphone jack.

Apple is expected to make more exciting updates in its next high-end iPhone, including a high-resolution screen that covers the phone's entire face. But the company has also suggested that much of its future growth will come from services like Apple Music, Apple Pay and the cut that Apple takes from application sales and subscriptions in the app store.

Apple executives, who are fond of using the word "revolutionary" to describe their products, have also acknowledged some missteps. After watching iPad unit sales spiral downward for 12 quarters in a row, the company introduced a cheaper model in March to win over schools that were flocking to Chromebooks. Apple is also likely to update its Pro models for businesses this year.

Apple also admitted that the striking cylindrical design of the Mac Pro, a personal computer that is important to its most demanding customers, turned out to be a mistake that limited its upgrade potential. A completely redesigned Mac Pro will be released next year, Apple executives said in early April during an unusual meeting with tech journalists to discuss the computer's shortcomings.

"We made something bold that we thought would be great for the majority of our Mac Pro users - and what we discovered was that it was great for some and not others," Philip Schiller, Apple's senior vice president for marketing, said at the meeting.

"We're sorry for that, what happened with the Mac Pro, and we're going to come out with something great to replace it."

'Wringing their hands'

Investors appear to be relieved that Apple sales have stabilised after last year's drop, said Neil Cybart, an independent analyst who writes about Apple at the website Above Avalon. "There is at least increased confidence in what Apple can do in the future," he said.

Kevin Walkush, a portfolio manager at Jensen Investment Management who loaded up on Apple shares near last year's lows, is one of those confident investors. "Apple is turning into the big Caddy that's going to cruise down the freeway, and there's a certain class of investors that are really comfortable with that - and we're that kind of investor," he said.

Heavy buying of Apple shares by Mr Buffett's company, Berkshire Hathaway, and by Apple itself has also helped support the stock price, accounting for one month's trading volume in the shares, according to Mr Cybart's calculations. Berkshire is now Apple's fifth-largest shareholder, owning 2.61 per cent of the company as of February 27.

In recent years, as United States phone carriers have stopped subsidising the purchase of new phones, consumers have been holding on to their old smartphones longer than the typical two-year upgrade cycle. The last time that Apple made big changes to its phone lineup was in 2014, when it first introduced models with larger screens.

Expectations and risks

Expectations are high that the new iPhones coming out this year will have enough improvements to prompt a big wave of new purchases. "People are excited about a feature-rich launch," said Timothy Arcuri, a technology analyst at Cowen & Company.

But as Apple pushes the innovation envelope, there are risks. The company has been having difficulty with the new type of fingerprint reader needed for its most advanced iPhone, which is expected to have a screen that runs edge to edge, with no physical home button, Mr Arcuri said.

He said Apple had just a few more weeks to work out the kinks if it hoped to meet its traditional September release date. Otherwise, it will have to delay the new phones or put the fingerprint reader on the back of the phone - a clunky solution adopted by Samsung for its Galaxy S8 phone that has been panned by reviewers.

"They're wringing their hands," Mr Arcuri said of Apple.

Even if Apple's new iPhones fail to deliver a large sales increase, investors are also hoping for changes in tax law that will benefit Apple. Last week, the Trump administration proposed a broad-based cut in the corporate tax rate and hinted at a possible tax break for profits held overseas that could prompt Apple to bring back tens of billions of dollars in foreign profits and distribute them to shareholders.

Potential breakthroughs are also in the works.

The company is developing augmented reality technology, including eyeglasses, that will overlay real objects with digital ones. Some expect a rudimentary form of augmented reality to show up in the next iPhone.

And two weeks ago, Apple received a permit from California regulators to begin testing self-driving cars on public roads.

Technological leaps like those would win back sceptics like Mr Landis. "History says that Apple does great but they never shake up the world," he said. "I need them to surprise me."

New York Times