Key points
- Apple’s innovation and profitability have made it an exceptional long-term investment.
- Services segment growth has helped offset stagnating iPhone sales.
- The company’s aggressive stock buybacks are helping support its share price.
With a market cap of more than $3.53 trillion, Apple is among the world’s most valuable companies. Its advantages ensure it will be a powerful force for years to come.
Apple stock price
Apple has been on the market far longer than many other tech companies. It went public at an initial public offering price of $22 in 1980. Since then, AAPL has been one of the most rewarding tech stocks for long-term investors.
But AAPL didn’t begin to rise rapidly until years after its IPO. The company released the Lisa, a precursor to the Macintosh computer, in January 1983. At this point, Apple stock was around 15 cents, adjusted for future splits. It wouldn’t reach a split-adjusted $1 until the dot-com era. AAPL reached $1 for the first time on Dec. 3, 1999. It dropped again once the bubble burst, falling to under 25 cents in October 2002.
The stock price slowly increased in the ensuing years, reaching a split-adjusted $1 in 2004. It continued growing, crossing the $6 mark in 2007. But it fell back to $3 during the Great Recession in 2008 and 2009.
AAPL has been on the rise since then. On July 15, 2024, it reached an all-time intraday high of $237.23. The stock surged after the company announced a new artificial intelligence platform called Apple Intelligence.
How has the Apple stock price performed?
AAPL has been an exceptional investment. Since its IPO over 40 years ago, it has generated extraordinary returns. In the past five years alone, AAPL has increased by more than 340%.
The iPhone is at the heart of Apple’s sales. But the company’s outperformance has continued even as iPhone sales growth began to stagnate in the mid-2010s.
Apple earnings
In fiscal 2023, Apple’s net sales decreased slightly to $383.3 billion, compared to $394.3 billion in 2022. Gross margin decreased slightly to $169.1 billion, compared to $170.8 billion the year before.
Apple generated most of its sales from the iPhone, totaling $200.6 billion in 2023. Services were a distant second, with $85.2 billion in net sales.
The company increased its cash reserves considerably in 2023 to nearly $30 billion. That was up from $23.6 billion the year before.
Earnings per share were nearly the same at $6.16 in 2023 and $6.15 in 2022. EPS is expected to be $6.70 this year, with an uptick in 2025 to $7.48.
Apple at a glance
Apple is a leading consumer electronics maker. Over half of its fiscal 2023 revenue came from the iPhone.
The company also sells MacBook laptops, iMac desktop computers, iPad tablets and Apple Watches. It generally competes at the medium-to-high end of its product markets and charges premium prices.
The services segment includes sales from the app store, iCloud storage, and advertising businesses. It also includes the Apple Pay mobile payment system and Apple Music. Services segment revenue comprised about 20% of the company’s total sales in fiscal 2023. The services segment also includes subscription revenue from Apple Fitness+, Apple TV+ and Apple One plans.
Apple controversies
Many people love Apple products. But the company isn’t immune to controversy.
One recent controversy involved the company’s proprietary Lightning port. Only Apple devices had this port, requiring specific charging cables. USB-C connectors, compatible with various devices, have become standard in the tech industry.
The European Commission passed a law in 2022 that required all mobile phones sold in the European Union to have USB-C ports by the end of 2024. Apple had little choice but to abandon the Lightning port. At the iPhone 15 announcement in 2023, the company said future generations would have USB-C connectors.
Apple also faced backlash in 2024 over its “Crush!” ad. The ad featured objects like a record player, books and a guitar being crushed into the new iPad Pro. It received widespread criticism for symbolizing tech’s destructive impact on creativity and humanity. Apple later apologized.
Warren Buffett dumping Apple stock
Warren Buffett’s holding company, Berkshire Hathaway, has long been a large holder of Apple stock. That is still true today, as Apple is Berkshire’s single largest portfolio holding. In addition, Berkshire is still one of the largest corporate holders of Apple stock.
However, the company has sold over 500 million shares of Apple stock in 2024 alone. That reduced the company’s Apple holdings by more than half. During Berkshire’s meeting in May, Buffett said he expects capital gains rates to increase. Analysts also believe Berkshire may be looking to increase its cash position.
Apple IPO
Apple went public on Dec. 12, 1980, at $22 per share. The stock has split five times, putting the split-adjusted IPO price at 10 cents per share.
The company raised $100 million with its IPO. Those who made a small investment in Apple’s IPO have greatly benefited. For example, if you invested $1,000 during the IPO, your investment would be seven figures today.
Apple stock splits
Apple’s most recent stock split was 4-for-1 in August 2020. If you crunch the numbers on all five stock splits, a single share of the company’s IPO stock would represent 224 shares of AAPL today.
On a split-adjusted basis, AAPL climbed as high as $1.34 in March 2000 during the tech bubble. But it dropped to under 24 cents in October 2002 after the dot-com bubble burst.
AAPL hit a split-adjusted intraday high of $237.23 on July 15, 2024.
| STOCK SPLIT DATE | STOCK SPLIT TYPE |
|---|---|
Aug. 28, 2020 | 4-for-1 |
June 9, 2014 | 7-for-1 |
Feb. 28, 2005 | 2-for-1 |
June 21, 2000 | 2-for-1 |
June 16, 1987 | 2-for-1 |
Opportunities and obstacles facing Apple
Apple is well-positioned to continue outperforming. But it faces several potential stumbling blocks.
The company is notoriously secretive about its internal product development. Still, it shows no signs of slowing down on innovation. In June 2024, Apple introduced Apple Intelligence, a new AI technology for iPhone, iPad, and Mac. A year prior, the company unveiled its Apple Vision Pro wearable headset and spatial computer.
Apple’s focus on its high-margin services segment has also created new growth sources for the company. In the third quarter of 2024, it posted an all-time revenue record in services. Product revenue increased year over year as well. But Apple’s stock buyback of more than $110 billion will continue to support its share price.
The company could face regulatory risks regarding AI innovations. But CEO Tim Cook said Apple plans to take a “deliberate and thoughtful” approach. Estimates of iPhone unit sales suggest no meaningful growth since 2015. But by adding AI features to devices, Apple could get customers excited again. That said, iPhone sales decreased slightly year overyear in the third quarter of 2024.
Strengths
- A long track record of successful innovation and revolutionary products and services.
- The high-margin services segment provides high-visibility growth opportunities.
- An aggressive share buyback program will support the stock price.
Weaknesses
- A high valuation compared to the competition.
- Given declining sales, the iPhone market may be reaching saturation.
- Ongoing regulatory risks associated with Big Tech antitrust crackdowns.
Nasdaq: Apple comparison
AAPL is one of the top stocks in the Nasdaq composite index, with a weight of 11.25%, as of June 28, 2024.
The table below lists the 10 stocks with the greatest weighting in the Nasdaq by market cap. It’s reordered daily at market close.
Apple stock forecast 2024
Analysts expect slightly higher revenue for Apple in 2024, with an average estimate of $390.3 billion versus $383.3 billion in 2023. Both numbers are lower than 2022’s revenue of $394.3 billion.
Of the 47 analysts surveyed, 23 recommend buying, nine rate it as “overweight,” 13 recommend holding, one rates it as “underweight,” and one recommends selling. At the time of this writing, the average price target is $244.31.
Apple stock forecast 2025
Analysts project increases in Apple’s revenue in 2025, with an average estimate of $421.4 billion. EPS is expected to increase to $7.48.
AAPL soared after the announcement of the AI platform in mid-2024. The stock is up more than20% in 2024. But given the $244.31 one-year price target, analysts don’t expect eye-popping returns, at least not immediately.
Making long-term predictions for an individual stock price is extremely difficult. Past performance doesn’t guarantee future results. Whether a stock has done well or fared poorly of late, the tide can shift overnight.
What can we expect in the coming years?
Apple’s bullish performance could continue if it maintains growth in the services segment. The company will likely need to continue growing revenue in various segments to offset slumping iPhone sales in the coming quarters. These include video, AppleCare, cloud services and payments.
Apple must continue to uphold its innovative reputation and keep iPhone users.
Daniel Newman, CEO and analyst at The Futurum Group, said Apple was late to the AI party. But the company is meeting consumers where they are rather than trying to anticipate demand.
“Creating multimodal interactions that can traverse device types and create continuity has been part of Apple’s secret sauce and will continue to be in the AI era,”
Newman said.
Frequently asked questions (FAQs)
The average target among the Wall Street analysts covering Apple stock is $210. Among 47 analysts, 23 recommend buying, nine rate it as “overweight,” 13 recommend holding, one rate it as “underweight” and one recommends selling.
At the time of this writing, AAPL hit an all-time intraday high of $237.23. It reached that price on July 15, 2024.
Apple’s stock has split five times since the company went public. On Aug. 28, 2020, it split 4-for-1. On June 9, 2014, it split 7-for-1. It split 2-for-1 on Feb.28, 2005, June 21, 2000, and June 16, 1987.
AAPL pays a quarterly dividend. Its yield is 0.44%. It pays dividends in February, May, August and November.
