NVIDIA Inventory can recently attracted all the attentionbut there are many others that are outperforming the broader market. One of them is another member of the so-called Magnificent Seven tech stocks: Apple.
A $1,000 investment in Apple in June 2014 would be worth more than $10,460 at Tuesday’s closing price of about $209, according to Morningstar Direct calculations. That represents compounded growth of more than 946 percent and an annualized return of 26.46 percent. (Shares were largely unchanged Thursday, trading at about $214 at 3 p.m. ET.)
This is not quite the explosive growth Nvidia has experienced in recent monthsbut it is still far outperforming the S&P 500 during the same period. And if you were lucky enough to get in when AAPL was founded in late 1980, that $1,000 investment would be worth over $2.1 million today, with an annual return of 19.22%.
Apple is one of seven stocks – along with alphabet, Amazon, MicrosoftMeta, Nvidia and Tesla – which drove the stock market to new heights in 2023 and 2024. However, it has been one of the weaker performers of the group in recent months, with earnings up just 1% in the last quarter and Decline in sales.
“Significant innovation”
Despite it, Bank of America recommends Apple as a buy. A research note published this week said that the recent launch of AI features called Apple Intelligence and the announcement that it will give outside developers access to more AI features “should drive significant innovation among developers.”
“We see conversational AI with context and privacy as key to monetizing the installed base of Apple devices over time through increased productivity, higher-priced apps, more subscriptions and payments from partners,” BofA’s Wamsi Mohan writes in the report.
Mohan also cites the fact that more consumers are likely to upgrade their iPhones in the coming years – to gain access to new AI features currently in development – and Apple’s ability to expand its services and other offerings as reasons to invest. In the best-case scenario, existing customers will quickly upgrade their phones and iPads to gain access to AI, and those who have remained loyal to other operating systems may switch.
On the other hand, generally slowing consumer spending could impact the company, potentially leading to weak iPhone 15 sales and generally longer iPhone replacement cycles. Customers could also simply not be interested in Apple Intelligence features, and demand could wane after interest initially wanes. Mohan also points to two Antitrust proceedings in the USA currently ongoing This could, among other things, have a negative impact on the company.
Another factor is that since the S&P 500 is weighted by market capitalization, the movements of companies like Apple and the other “Magnificent Seven” – whether up or down –can have an outsized impactSome analysts and financial advisors are therefore warning that the technology giants may be somewhat overvalued, which could impact retail investors who are putting more and more money into index funds.