Nvidia stock may be getting all the attention lately, but there are plenty of other stocks outperforming the market. One of them is another member of the so-called Big Seven tech stocks: Apple.
Morningstar Direct calculates that a $1,000 investment in Apple in June 2014 would have been worth more than $10,460 at Tuesday’s closing price of about $209. The cumulative growth exceeds 946%, and the annual return reaches 26.46%. (Shares were essentially flat Thursday, trading around $214 at 3 p.m. ET.)
That’s not the explosive growth Nvidia has experienced in recent months, but it’s still well ahead of the S&P 500 over the same period. If you were lucky enough to join AAPL when it was founded in late 1980, that $1,000 investment would be worth more than $2.1 million today, an annualized return of 19.22%.
Apple is one of seven stocks (in addition to Alphabet, Amazon, Microsoft, Meta, Nvidia and Tesla) that will push the stock market to new highs in 2023 and 2024. One of the stocks in recent months that has seen profits rise just 1% in its most recent quarter while sales are falling.
“major innovation”
Still, Bank of America has a buy rating on Apple, writing in a research note released this week that the company recently launched an artificial intelligence feature called Apple Intelligence and announced it would give third-party developers access to more Multiple AI features that “should drive significant innovation” come from the developer.
“We believe that over time, conversational AI with context and privacy will be key to monetizing Apple’s device install base,” Bank of America’s Wamsi Mohan wrote in the report. Productivity will increase, app prices will be higher, and partner subscriptions and payments will increase.
Mohan also pointed to the likely increase in consumers upgrading their iPhones in the coming years – to gain access to new artificial intelligence features being developed – and Apple’s ability to expand its services and other products as reasons for investment. In the best-case scenario, existing customers will rush to upgrade their phones and iPads to use AI, while those loyal to other operating systems may make the switch.
On the downside, overall weakness in consumer spending could affect the company, potentially leading to weaker iPhone 15 sales and longer iPhone replacement cycles generally. Customers may also simply not be interested in Apple Intelligence capabilities, and demand may become tepid after initial interest wanes. Mohan also pointed to two antitrust cases currently pending in the United States that could have a negative impact on the company, among other concerns.
Another factor: Because the S&P 500 is weighted by market capitalization, the movements of companies like Apple and the rest of the Big Seven, whether up or down, can have a huge impact. That has led some analysts and financial advisers to warn that tech giants may be a bit overvalued, which could impact retail investors who are pouring more and more money into index funds.
