Apple (AAPL (opens in new tab)) stock has rebounded strongly this year after a terrible 2022, but stocks are still well below their all-time highs.
Even after a year-to-date gain of almost 19% — versus a 5.8% increase in the S&P 500 — Apple stock is still some 17% below its early 2022 record. Apple’s market cap fell to $2.45 trillion from $2.97 trillion — a loss of more than half a trillion dollars in shareholder value.
That’s embarrassing for anyone who showed up late to the Apple party, but it’s hard to feel much sorry for really old shareholders. After all, they have achieved almost incomparable returns over the past few decades.
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From January 1990 through December 2020, AAPL stocks created $2.67 trillion in shareholder wealth, or an annualized dollar-weighted return of 23.5%, according to an analysis by Hendrik Bessembinder, a professor of finance at the W. P. Carey Business School (opens in new tab) at Arizona State University.
According to Bessembinder’s findings, which take into account the increase in a stock’s market value adjusted for cash flows in and out of the company and other adjustments, Apple is indeed one of the 30 best stocks of the past 30 years.
Granted, AAPL stock traded sideways for the early 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 like the iPod, MacBook and iPad.
But what really set Apple on its way to becoming the world’s largest publicly traded company — and one of the hedge fund favorites blue chip stocks – was the debut of the iPhone in 2007.
Today, Apple isn’t just a gadget supplier; it sells an entire ecosystem of personal consumer electronics and related services. And it’s a sticky ecosystem.
No less an eminence than Warren Buffett has called iPhone maker Berkshire Hathaway’s (BRK.B (opens in new tab)) “third company”, citing the fantastic brand loyalty of Apple fans as one of the reasons for going all in on the stock. (Apple accounts for nearly 39% of the value of the Berkshire Hathaway Stock Portfolio.)
No wonder the iconic technology company was tapped to become one of the 30 elite Dow shares. In 2015, Apple replaced AT&T (T (opens in new tab)) in the Dow Jones Industrial Average.
The bottom line on Apple Stock?
Over the past two decades, Apple stock has generated total returns (price change plus dividends) of more than 69,000%, or more than 38% year-over-year.
Take a look at the chart above and you’ll see that if you invested $1,000 in Apple stock 20 years ago, it would be worth more than $695,000 today. By comparison, the same $1,000 invested in the S&P 500 would theoretically have grown to just over $7,300 over the same period.
For those wondering if AAPL stocks are a buy at current levels, Wall Street thinks so. Of the 45 analysts tracking Apple stocks tracked by S&P Global Market Intelligence, 25 rate it as Strong Buy, nine say Buy, and nine call it Hold. One analyst gives a Rare Sell rating on stocks, and one has it at Strong Sell. That amounts to a consensus recommendation from Buy, with great conviction.
Meanwhile, the street’s average target price of $169 gives AAPL stock an implied upside of about 10% over the next 12 months or so.