Apple Stock Analysis: Can It Be Butterfly Effects?

Launching a new product, like the new iPhone, has become the biggest annual event for Apple (AAPL). In the coming weeks of 2022, Apple is expected to release the iPhone 14, iPhone 14 Max, iPhone 14 Pro, and iPhone 14 Pro max, all of which are part of the iPhone 14 series. The public and the press have a vested interest in this new product, which will affect Apple’s stock price (AAPL).

What kind of influence will this new product have, and in what ways? For these reasons, since the introduction of the first iPhone, Finxpd has been tracking Apple stock price data, tracking how it has behaved, and collecting other relevant data for investors and analysts to examine.

What Is Apple?

Apple has, undoubtedly, amassed one of the most loyal customer bases of any company in the world over the past fifty years.

The forward-thinking company, which has been active since the middle of the last century, is most famous for its iPhones, with each new release causing a buying frenzy all across the globe.

With a market worth of $2.35tn, Apple has surpassed Saudi Aramco and Microsoft to become the largest company in the world (MSFT).

Warren Buffett has long held a fondness for Apple stock. The first quarter of 2022 saw Apple become Buffett’s Berkshire Hathaway’s (BRKb) largest holding.

It’s suitable for a company’s market cap if it consistently reports earnings above market expectations. It’s no coincidence that they routinely massage earnings reports to make them line up with or exceed predictions, all in an effort to boost stock prices artificially. Therefore, the Securities and Exchange Commission (SEC) carefully scrutinizes earnings management.

A few ways a corporation can affect its stock price is by introducing a new, profitable product or service. Investors might gain or lose a lot of money depending on how accurate Wall Street valuations are. This is since predicting how a product sold in multiple countries would affect a business’s bottom line and share price is challenging.

Apple’s stock price and overall financial performance highly depend on the company’s product sales. Nonetheless, the two aren’t always linked, though. Apple stock, which has been soaring for the past few years, reached a new all-time high toward the end of 2021, when its market capitalization was close to $3 trillion.

Apple: A Brief History

Apple’s sales may be broken down into five broad groups based on the company’s most popular product lines:

• iPhone
• Mac products
• iPad
• Wearables, home, and accessories
• Services

Even though Apple (AAPL) has made a lot of headlines over the past few years because of its innovative products and massive financial reserves, the business has also experienced some setbacks.

Apple’s cash currently accounts for about 10% of all corporate money, but in 1997 it had one of its worst days ever when reports surfaced that Microsoft (MSFT) was assisting the struggling company with its lack of cash. Apple has become the most valuable U.S. firm in its history. The launching of the iMac G3 by Apple in 1998 marked the beginning of the company’s comeback. Here are seven of the company’s most significant product launches and their effect on the stock price.

August 1998: The Beginning of iMac G3

In 1998, Apple introduced the iMac G3 on August 15. The stock price of AAPL went down 14% in the next month despite an initial gain of 3.56 % when the market reopened on Monday, August 17. The iMac G3 was the key reason for Apple’s recovery, even though the stock price dropped and the new device was criticized.

This colorful item was manufactured up until 2012.

During this presentation in 1998, Apple’s iMac G3 was unveiled by Steve Jobs. See this game-changing invention in action in the throwback video below.

October 2001: Introducing First iPod

On October 23, 2001, Apple unveiled the world’s first iPod. Although the new device was a huge step forward in the music industry, its debut resulted in a drop of 2.71% and 5.57% in Apple’s stock price, respectively. It took about a month for Apple stock to recover.

On October 23, 2001, Apple unveiled the world’s first iPod. Although the new device was a huge step forward in the music industry, its debut resulted in a drop of 2.71% and 5.57% in Apple’s stock price, respectively. The stock price of Apple didn’t recover for nearly a month.

Only eight months after Apple debuted iTunes did the iPod make its debut. Apple has released nearly 20 new generations of the iPod since the first model was introduced. This item was Apple’s most lucrative until the iPhone came out.

At a low-key Apple music event in 2001, Steve Jobs introduced the world to the iPod. Jobs remarked that the novelty of this first-of-its-kind product made it especially promising.

June 2007: It finally Happens: Apple unveils the World’s First iPhone.

Released on June 29, 2007, the original iPhone was unveiled in January 2007. Apple’s stock price increased 1.23 percent the day it was released and another 16.0 percent in the following month. In 2008, Steve Jobs said the company aimed to sell 10 million iPhones. Despite the doubts of analysts and investors, Apple sold 13.7 million iPhones that year.

In 2007, Steve Jobs unveiled the first iPhone, a revolutionary mobile device that would alter the communications landscape forever. Jobs describes the phone’s various functions, including its use as a phone, an iPod, and a web browser.

April 2010: Arrival of Apple’s First iPad

In 2010, Apple introduced the world to the world’s first iPad on April 3. The company’s stock price showed no significant reaction when the market started on Monday, April 5, but it increased by 13% by the end of the month. The stock price rose when Apple debuted the iPod, but it was partly owing to the company reporting better-than-expected earnings after the month.

Apple has introduced four other iPads since the original iPad’s debut, the most recent being the iPad Mini.

September 2014: The New Size of the iPhone and The Launching of the Apple Watch

On September 9, Apple unveiled the iPhone 6, iPhone 6 Plus, and the first Apple watch series, with sales starting on September 19. Apple sold 10 million iPhones in its first weekend, more than any other company has ever sold in a single weekend for any iPhone model.

The stock price dropped despite the number of phones sold because of concerns that the devices were easily bent.

September 2016: iPhone 7 Series, The New Era of the Home Button

Apple’s product lineup had grown since the iPhone 6 in 2014, when the company targeted a narrower demographic. The trend was inaugurated with the iPhone 7, which came in regular plus sizes. To expand its market share in developing countries, Apple has offered a cheaper version of the iPhone alongside its premium model with the current lineup of smartphones.

This strategy’s initial stock market results were less than promising, with share prices remaining flat or falling throughout 2015.

The iPhone 7 and the iPhone 7 Plus were unveiled on September 7, 2016, and made available to the public in a few days. Although AAPL stock dropped following the unveiling of the new iPhones, it quickly recovered as the company reported selling out of all iPhone 7 Plus pre-orders ahead of the sale date of September 16. In addition, T-Mobile declared that the iPhone 7 had set a new record for the carrier’s one-day pre-sale.

September 2017: The New Design with the Notch, iPhone X

They were investing in IT stocks in general, and the broader stock market, in general, prospered after Donald Trump was elected president in November 2016. During this time, Apple’s stock reached a series of all-time highs.

Apple changed course in 2017 when it released the $1,000 iPhone X. This was an exorbitant price in the already crowded smartphone industry. On September 12, Apple introduced not only the iPhone 8 and 8 Plus but also the iPhone X. Release date for the handsets was November 3. The news caused a dip in share price at the end of September, followed by a significant increase in the days leading up to the launch. The stock price of AAPL quickly recovered to all-time highs within about a week of its debut.

Despite the overwhelmingly positive critical reception of the iPhone X, analysts have had to decrease their sales projections. iPhone sales were down 1% year over year, according to the company’s earnings release for the fourth quarter of 2017.

Whether or not premium products like the iPhone X will be essential to Apple’s strategy in the future is an open question. Since the announcement, share prices have remained relatively stable despite a severe market drop at the beginning of February.

An Analysis of Apple Stock Performance Following Each Major iPhone Announcement

As history shows, Apple stock usually experiences a sharp sell-off soon following a major announcement. In contrast, yield returns are often shown in the subsequent 60 days. Now, let’s have a look at the details.+

How Apple Stock Reacted the Day After the iPhone Launch

There is usually an immediate and adverse reaction from investors to Apple stock following major iPhone events. Eight out of the last 13 events saw a decline or no change in the stock price 24 hours after the reveal, as seen below.
The logic behind this is sound. Hype and rumors usually precede an Apple event, so there isn’t much of a surprise when it happens. This is a prime example of the “buy the rumor, sell the news” phenomenon.

Sixty days after the iPhone event, AAPL shares have risen significantly.

Positive effects on the stock price often appear within two months after the iPhone introduction. From a trading perspective, 9 of the last 13 introductions have resulted in a gain for Apple shares 60 days after the initial public offering.
When the iPhone release fails to meet expectations, Apple’s stock price plummets dramatically, as seen by the data. The stock dropped 20% after the release of the iPhone last year as sales plummeted. There was an 18% drop after the iPhone 5 event.

That is to say, and there will be a moderate increase in the event’s popularity if it is well accepted but a steep drop if it is not.

Apple’s Shares Raise ahead of Fall Product Launch and the New iPhone 14

The price of Apple shares has been rising in the weeks leading up to the company’s fall product launch event. During a September event, the electronics giant is shown revealing the iPhone 14 series of handsets with other new products.

It has been rumored that Apple (AAPL) is preparing for an iPhone 14 debut that will be at least as significant as the launch of the iPhone 13 last year. According to Bloomberg, Apple has instructed its manufacturers to produce 90 million of its newest devices, which is on par with the output during last year’s introduction time. According to Bloomberg, Apple is banking on its wealthy clientele to keep iPhone sales going throughout the economic downturn.

Bloomberg reports that Apple Inc., headquartered in Cupertino, California, still plans to produce around 220 million iPhones in 2022, which is on par with projections from the previous year.

Analysts also report declining sales of mid-range and budget Android handsets.

As the release of the iPhone 14 approaches, Apple stock rises.

Apple stock finished the day up 0.24% at $173.04 (August 17, 2022, 09:32 GMT) on the stock market.
Compared to the S&P 500, Apple stock has been performing better recently, shown in the relative performance indicator rising to unimaginable heights.
There will reportedly be four new iPhone 14 models released by Apple, all of which will be minor updates to the company’s current top-of-the-line offerings. The 16th-generation iPhones are the third generation of Apple’s devices to support 5G.

Which Begs the Question: Is Apple Recession-Proof?

During an appearance on CNBC, Bernstein analyst Toni Sacconaghi predicted that the release of the iPhone 14 would reveal Apple’s recession-proof status. After the corporation reported a stronger-than-expected quarterly performance in June, some analysts made that assertion.

According to Sacconaghi, there is still a need for more proof of Apple’s supposed resilience.

On September 13, Loop Capital analyst John Donovan announced to investors that the rumor mill suggests Apple will hold a fall product announcement event. Yet, “increasing evidence” suggests that Apple could move the event up a week, to September 6, he claimed. As far as stock recommendations go, Apple is a buy, according to Loop.

At the same event, we might expect Apple to unveil the iPhone 14 and the Apple Watch Series 8.

Concluding

Investors’ confidence in Apple’s continued success in the smartphone market is reflected in the company’s rising stock price in Cupertino. Investors, though, remain hopeful that Apple will surprise them with yet another groundbreaking product. However, if a company cannot deliver pioneering innovation, it may decline its share price.

Apple’s stock price has only spiked dramatically after introducing a select few products. Day traders will focus on a new Apple product when it is released. However, the quick profits they anticipate are frequently an illusion that vanishes as quickly as they appear.

Nevertheless, each product significantly boosted stock prices over the long term. It would be best if you did not base your investment strategy on short-term fluctuations but the big picture over the long haul. Eventually, the market system will determine its actual worth. Put corporations like Apple to work for you by trusting in the public’s collective intelligence rather than the short-term gains of speculators.

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