What Will Drive Apple Stock’s Next Big Move?

Apple stock (NASDAQ:AAPL) has a robust history of quick up moves, with rallies of over 30% in less than two months during several years including 2010, 2019, and 2024. Particularly, there were two instances where the gains surpassed 50% within approximately two months, notably in 2012 and 2020.

Should historical trends persist, forthcoming catalysts might propel Apple shares to new significant peaks, benefiting investors who identify these momentum chances.

Recently, Apple’s stock has spiked, continuing its year-long rise following outstanding Q4 earnings driven by stronger than anticipated demand for the latest iPhone 17 series and record-setting Services revenue. However, the biggest narrative driving the stock is Apple’s big AI ambitions, underscored by powerful silicon and the “Apple Intelligence” initiative, which investors believe could spark a notable device upgrade cycle.

Factors That Could Enhance The Stock

• AI Leadership: Apple’s privacy-focused, on-device AI and more sophisticated capabilities for Apple Intelligence have the potential to stimulate substantial hardware upgrades and service revenue increases.
• New Product Cycle: The successful introduction of a considerably enhanced (cheaper, M5 chip) Vision Pro 2 or a highly awaited foldable iPhone in 2026 could unlock vast new markets and drive big replacement cycles.
• India Market: India is projected to become Apple’s third-largest market by 2026, with an anticipated production value of $28 billion in FY26 and strong iPhone demand, indicating tremendous future growth.

If you’re looking for upside with reduced volatility compared to a single stock, consider the High Quality Portfolio (HQ) – HQ has surpassed its benchmark – a blend of S&P 500, Russell, and S&P midcap index, and has recorded returns greater than 105% since its launch.

Current Financial Outlook

It’s certainly beneficial if the fundamentals are solid. For insights on AAPL, read Buy or Sell AAPL Stock. Here are a few important figures.

• Revenue Growth: 6.0% LTM and 1.8% last 3-year average.
• Cash Generation: Nearly 23.5% free cash flow margin and 31.9% operating margin LTM.
• Valuation: Apple stock trades at a P/E multiple of 40.4

But How Does The Stock Perform In Difficult Times?

When considering Apple’s risk, it is beneficial to evaluate how severe its declines have been during major sell-offs. During the Dot-Com Bubble, it dropped over 80%, and the Global Financial Crisis experienced a decline of around 61%. The 2018 correction and Covid sell-off both saw Apple fall approximately 30-40%. Even the recent inflation surge affected it by about 31%. Strong companies like Apple still confront sharp declines when the market shifts negatively.

However, the risk isn’t restricted to significant market crashes. Stocks can decline even in favorable market conditions – consider instances like earnings reports, business updates, and changes in outlook. Read AAPL Dip Buyer Analyses to observe how the stock has bounced back from sharp declines in the past.

The Trefis High Quality (HQ) Portfolio, comprising a mix of 30 stocks, has a history of consistently outperforming its benchmark, which encompasses all three – the S&P 500, S&P mid-cap, and Russell 2000 indices. What accounts for this? Collectively, HQ Portfolio stocks have delivered superior returns with lower risk compared to the benchmark index; it’s a steadier investment experience, as shown in HQ Portfolio performance metrics.