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5 reasons Apple's stock is at a record high

iPhone turns 10

Apple (AAPL) CEO Tim Cook is starting to emerge from the shadow of the company's late co-founder and visionary, Steve Jobs.

That's one lesson that can be gleaned from the company's shares hitting an all-time high today of $159.75 as investors cheered Apple's better-than-expected quarterly earnings report released after the market closed on Tuesday. The stock closed at $157.14, up 4.7 percent ($7.09) on the day. That robust jump helped the Dow Jones industrials index finish above 22,000 for the first time ever.

The latest results come just ahead of the 10th-anniversary launch of the iPhone 8, which has tempered demand for the current version, by far the company's most profitable product. But Apple still crushed Wall Street's estimates for the quarter.

The iPhone's indelible mark on our culture

Given the company's generally consistent results lately, the 56-year-old Cook is starting to gain credibility among investors who have wondered whether the company's best days were behind it.

"The simple answer is, he's calmed their fears for now and is laying the groundwork to calm their future fears," said Gene Munster, an analyst with Loup Ventures. "Investors now give him credit for the sustainability of the iPhone hardware business, along with the reliable double-digit services growth. Separately, Cook is aggressively laying the groundwork with investors regarding Apple's position in augmented reality."

Let's take a closer look at what the latest excitement is about:

The bottom line

Fiscal third-quarter earnings hit $8.72 billion, or $1.67 per share, versus $7.8 billion, or $1.42, a year earlier. Revenue jumped to $42.36 billion. Analysts had expected a per-share profit of $1.57 on sales of $44.89 billion. As earnings beats go, Apple's was impressive, considering that investors often reward Fortune 500 companies that exceed forecasts by just a penny or two.

The iPhone

Many iPhone owners are waiting to upgrade their devices until the much-hyped iPhone 8 is released. Even so, iPhone sales rose to $41.03 million, beating the $41 million analysts had expected. Apple also hinted that the iPhone 8 would be released in September, quelling fears of a delay.

iPads, the Apple Watch and Macs

Apple's tablets, which have struggled, rebounded in the quarter with a better-than-expected 15 percent sales gain to 11.42 million units as consumers responded to the company's refreshed line. The iPad also is picking up with business customers. Walmart (WMT), for instance, plans to use more than 19,000 iPads for employee training across 50 states.

Apple Watch sales surged 50 percent to 3.5 million units as consumers responded positively to features like GPS and fitness tracking. Mac computers also posted solid results, gaining market share even though market watcher IDC noted that the overall PC market contracted.

Services revenue

Apple's services revenue hit a record $7.3 billion in the quarter, a 22 percent year-over-year gain, fueled by gains in Apple Music, the App Store and iCloud storage. The division grew to the size of a Fortune 500 company sooner than Apple had expected, expanding by double-digit percentages in all geographies where it operates. Apple is expecting the division's business to double over the next four years.

Augmented reality

Apple expects its iOS operating system to be the world's biggest augmented-reality platform as soon as iOS 11 ships later this year. The company has high hopes for the technology. As Cook noted: "We believe AR has broad mainstream applicability across education, entertainment, interactive gaming, enterprise and categories we probably haven't even thought of."