How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Apple (AAPL) ten years ago? It may not have been easy to hold on to AAPL for all that time, but if you did, how much would your investment be worth today?
Apple's Business In-Depth
With that in mind, let's take a look at Apple's main business drivers.
Apple’s business primarily runs around its flagship iPhone. However, the Services portfolio that includes revenues from cloud services, App store, Apple Music, AppleCare, Apple Pay, and licensing and other services now became the cash cow.
Moreover, non-iPhone devices like Apple Watch and AirPod gained significant traction. In fact, Apple dominates the Wearables and Hearables markets due to the growing adoption of Watch and AirPods. Solid uptake of Apple Watch also helped Apple strengthen its presence in the personal health monitoring space.
Headquartered in Cupertino, CA, Apple also designs, manufactures and sells iPad, MacBook and HomePod. These devices are powered by software applications including iOS, macOS, watchOS and tvOS operating systems.
Apple’s other services include subscription-based Apple News+, Apple Card, Apple Arcade, new Apple TV app, Apple TV channels and Apple TV+, a new subscription service.
In fiscal 2020, Apple generated $274.52 billion in total revenues. The company’s flagship device iPhone accounted for 50.2% of total revenues. Services, Mac, iPad and Other products category contributed 19.6%, 11.2%, 8.6% and 10.4%, respectively.
Apple primarily reports revenues on a geographic basis, namely the Americas (North & South America), Europe (European countries, India, Middle East and Africa), Greater China (China, Hong Kong & Taiwan), Japan and Rest of Asia Pacific (Australia & other Asian Countries).
In fiscal 2020, Americas, Europe, Greater China, Japan and Rest of Asia-Pacific accounted for 45.4%, 25%, 14.7%, 7.8% and 7.1% of total revenues, respectively.
Apple faces stiff competition from the likes of Samsung, Xiaomi, Oppo, Vivo, Google, Huawei and Motorola in the smartphone market. Lenovo, HP, Dell, Acer and Asus are its primary competitors in the PC market. Other notable competitors are Google & Amazon (smart speakers) and Fitbit & Xiaomi (wearables).
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Apple a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in May 2011 would be worth $10,657.77, or a gain of 965.78%, as of May 4, 2021, according to our calculations. This return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 209.05% and gold's return of 13.59% over the same time frame.
Looking ahead, analysts are expecting more upside for AAPL.
Apple’s second-quarter fiscal 2021 results reflected continued momentum in the Services segment, driven by a robust performance of App Store, Cloud Services, Music, advertising and AppleCare. Moreover, iPad, Mac and Wearables contributed strongly to the quarterly results. Further, iPhone sales increased due to strong demand for iPhone 12 devices. China and Japan iPhone sales increased significantly. Apple did not provide any guidance due to uncertainties triggered by the pandemic. Apple’s near-term prospects are bright, driven by new iPhones that support 5G, revamped iPad and Mac line-up of devices, health-focused Apple Watch and robust growth in the Services business. However, increasing scrutiny and legal woes over App Store is a headwind. Shares have underperformed the S&P 500 year to date.
Shares have gained 5.27% over the past four weeks and there have been 11 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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