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Apple Shares Are Red Hot Amid Samsung's Flaming Phone Issues

Shares of Apple's stock bounced 1.9 percent Monday amid reports that Samsung had adjusted production of its Galaxy Note 7 smartphone.
/ Source: CNBC.com

Shares of Apple's stock bounced 1.9 percent Monday amid reports that Samsung had adjusted production of its Galaxy Note 7 smartphone to "ensure quality and safety matters."

At least five reports have surfaced of Galaxy Note 7 phones overheating or catching fire, according to the AP, despite a global recall of the handsets last month. The continuing issues with the phones, which compete with Apple's iPhone 7, have led some to sound the death knell for the product.

"We see a more favorable competitive landscape and higher Android switcher rates for Apple over the next 12-18 months as Samsung's issues may weigh on future product launches and given Apple's strong potential offerings," wrote Angelo Zino, equity analyst at CFRA Research.

Apple's stock move had the most positive impact on the Nasdaq 100 Monday morning. CNBC reached out to Apple for comment.

"We recognize that carrier partners have stopped sales and exchanges of the Galaxy Note 7 in response to reports of heat damage issues, and we respect their decision," Samsung told CNBC. "We are working diligently with authorities and third party experts and will share findings when we have completed the investigation. Even though there are a limited number of reports, we want to reassure customers that we are taking every report seriously."

Samsung shares closed down 1.52 percent in the Korean trading session, but are still up 15 percent over the past three months as the conglomerate reported stronger-than-expected earnings. In addition to a wide range of products, Samsung produces chips and screens for its rival smartphone makers.

Apple shares are up around 20 percent over the same three-month period, when it debuted its new iPhone 7. Analysts surveyed by FactSet expect Apple to sell 45 million iPhone units in the September quarter, down from 48 million a year ago but up from 39 million in 2014, when the iPhone 6 debuted.

It all comes just a day before the pair are slated to face off in the Supreme Court over a smartphone design patent case.