Apple (AAPL) stock went into a funk after hitting an all-time closing high in the middle of December, but it's hard to feel too bad for long-term shareholders. AAPL was still up more than 40% over the past year in early January.
Besides, it's still by far one of the best stocks of all time.
A disappointing fiscal third-quarter earnings report sparked a mid-summer selloff in Apple stock, as market participants fretted over the iPhone maker's third consecutive year-over-year drop in quarterly revenue. Apple beat Wall Street's earnings and revenue forecasts for its fiscal fourth quarter too, but overall sales declined for a fourth quarter in a row.
Shares in Apple rallied hard into the end of 2023 along with the other Magnificent 7 stocks, but a couple of analyst downgrades to Apple stock the first week of 2024 sparked another round of weakness.
Bulls say you should buy the dip in Apple stock, which has put the company's market capitalization back below $3 trillion. And while the latest stumble is certainly no fun for anyone who came to the Apple party late, as noted above, it's tough to have much pity for truly long-time shareholders. After all, they've enjoyed pretty much incomparable returns over the past few decades.
From January 1990 through December 2020, AAPL stock created $2.67 trillion in shareholder wealth, or an annualized dollar weighted return of 23.5%, according to an analysis by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University.
Indeed, per Bessembinder's findings, which account for a stock's increase in market value adjusted for cash flows in and out of the business and other adjustments, Apple was the best stock in the world over those 30 years.
True, AAPL stock traded sideways for the first few years of the 21st century, but an explosion of innovation soon put an end to that. Under the visionary leadership of the late Steve Jobs, Apple essentially reinvented itself for the mobile age, launching revolutionary gadgets such as the iPod, MacBook and iPad.
But what really set Apple on its course to becoming the world's largest publicly traded company – and one of hedge funds' favorite blue chip stocks — was the 2007 debut of the iPhone.
Today, Apple isn't just a purveyor of gadgets; it sells an entire ecosystem of personal consumer electronics and related services. And it's a sticky ecosystem at that.
No less an eminence than Warren Buffett has called the iPhone maker Berkshire Hathaway's (BRK.B) "third business," noting Apple fans' fantastic brand loyalty as one reason for being all-in on the stock. (Apple accounts for almost 39% of the value of the Berkshire Hathaway equity portfolio.)
No wonder the iconic tech firm was tapped to become one of the elite 30 Dow Jones stocks. In 2015, Apple replaced AT&T (T) in the Dow Jones Industrial Average.
The bottom line on Apple stock?
(Image credit: YCharts)
Over the past 20 years Apple stock generated an annualized total return (price change plus dividends) of 37%. By comparison, the S&P 500 delivered an annualized total return of 9.6% over the same span.
What does that look like on a brokerage statement? Check out the above chart and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth almost $530,000. The same $1,000 invested in the would have theoretically turned into $6,186 over the same period.
For those wondering if Apple stock is a buy at current levels, Wall Street mostly thinks so. Of the 45 analysts covering AAPL surveyed by S&P Global Market Intelligence, 20 rate it at Strong Buy, seven say Buy, 14 have it at Hold, three say it's a Sell and one calls it a Strong Sell. That works out to a consensus recommendation of Buy, with mixed conviction.
More Stocks of the Past 20 Years
If You'd Put $1,000 Into Disney Stock 20 Years Ago, Here's What You'd Have Today
If You'd Put $1,000 Into Intel Stock 20 Years Ago, Here's What You'd Have Today
If You'd Put $1,000 Into IBM Stock 20 Years Ago, Here's What You'd Have Today
If You'd Put $1,000 Into Amazon Stock 20 Years Ago, Here's What You'd Have Today
If You'd Put $1,000 Into Nvidia Stock 20 Years Ago, Here's What You'd Have Today
If You'd Put $1,000 Into Netflix Stock 20 Years Ago, Here's What You'd Have Today
If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today
If You'd Put $1,000 Into Adobe Stock 20 Years Ago, Here's What You'd Have Today
What does that look like on a brokerage statement? Check out the above chart and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth almost $454,000. The same $1,000 invested in the S&P 500 would theoretically have turned into almost $7,000 over the same period.
If you had invested $1,000 in Apple stock on Feb. 4, 1997, today, you would have $1,343,269. Likewise, if you had invested $1,000 in an index fund replicating Nasdaq, you would have $11,038. A similar $1,000 investment in an index fund that replicates the S&P 500 would be worth $6,140.
Indeed, it took off so much that if you put a grand into Microsoft stock two decades ago, today it would be worth about $25,500. That's good for an annualized total return (price change plus dividends) of 17.6%.
The stock has been a phenomenal investment since that momentous event. Specifically, it returned a total of 7,390% over the last 17 years, compounding at 28.7% annually. That means an initial investment of $15,000 in January 2007 would now be worth $1.1 million.
What does that look like on a brokerage statement? Check out the above chart and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth almost $454,000. The same $1,000 invested in the S&P 500 would theoretically have turned into almost $7,000 over the same period.
This means that your $1,000 10 years ago — technically, $1,002 — would have bought 60 shares of Tesla. As of Mar. 3, 2024, those 60 shares of Tesla would be worth $12,158.40. That marks a 28.342% annual rate of return.
Over the past decade, you would have done even better, as the S&P 500 posted an average annual return of a whopping 12.68%. Here's how much your account balance would be now if you were invested over the past 10 years: $1,000 would grow to $3,300. $5,000 would grow to $16,498.
So, if you had invested in Nvidia ten years ago, you're likely feeling pretty good about your investment today. According to our calculations, a $1000 investment made in March 2014 would be worth $172,169.75, or a 17,116.97% gain, as of March 1, 2024.
Those gains translate to a 36.6% compound annual growth rate for Apple compared to a 7.4% CAGR for the S&P 500 in that time. That means that $10,000 in AAPL stock purchased 20 years ago would be worth about $5.08 million today, assuming reinvested dividends.
Buffett began buying Apple in the first quarter of 2016, but there's no way to know exactly what his average share price was. But if you use the highest closing that quarter as a conservative estimate, it means that you would have paid $27.06 per share for Apple.
With its 3-star rating, we believe Apple's stock is fairly valued compared with our long-term fair value estimate of $160 per share. Our valuation implies a fiscal 2024 adjusted price/earnings multiple of 25 times, a fiscal 2024 enterprise value/sales multiple of 7 times, and a fiscal 2024 free cash flow yield of 4%.
But if you were smart enough to invest $1,000 in Apple stock at the start of the year 2000, you'd be sitting on a monster gain of 21,230%. This means that modest investment would be worth a whopping $213,000 today (as of July 27).
According to 42 analysts covering Apple, the share price is forecast to rise up to $201.16 per share in 2024 before reaching fair value. The company has a solid financial track record, numerous products in its lineup, and a brand name that is second to none.
Does Apple Pay a Dividend? Yes, AAPL has paid a quarterly dividend since 2012. The company also paid a quarterly dividend from November 1988 to November 1995 before suspending it for seventeen years.
Therefore, $1,000 would've bought 55 shares of Amazon at its IPO, but you'd actually have 13,200 shares today with a cost basis of $0.075 per share. Since Amazon trades at $102.24 today, that represents a whopping 136,220% return. In dollar terms, your $1,000 investment would be worth over $1.36 million today.
These three are gigantic trillion-dollar companies today, but they weren't always that large. Apple debuted on the public markets in 1980. If you invested $1,000 in the company, then your investment would now be worth nearly $1.5 million. But how many people buy a stock on its IPO?
Apple (NASDAQ:AAPL) is the world's most valuable company as of 2023. A $10,000 investment during the Apple IPO in 1980 would be worth $17,716,460 today.
Introduction: My name is Jeremiah Abshire, I am a outstanding, kind, clever, hilarious, curious, hilarious, outstanding person who loves writing and wants to share my knowledge and understanding with you.
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