Stock markets have been falling this week on growth concerns as well as the unpredictability of the “delta variant” of Covid-19.
Meanwhile, the Chinese government hasn’t helped its own stocks as a clampdown on China’s giant tech stocks sparked a sell-off in the Hong Kong stock market.
So, for long-term investors, it might be a surprise to learn that the world’s biggest company (by market cap), Apple Inc (NASDAQ: AAPL), actually saw its share price close at an all-time high this week.
Reliable tech giant
The iPhone maker was flying high last year after the Covid-19 pandemic saw a new cycle of purchases for a range of its products; from iPhones and iPads to MacBooks and Airpods.
Despite losing a quarter of its value in March of 2020, Apple shares actually gained around 80% for the whole year – an impressive feat for a company already boasting a US$1 trillion market cap.
While it took nearly four decades for Apple to reach US$1 trillion (in 2018), it only took an additional two years for the company to double that and blow past US$2 trillion.
That was also helped by a 4-for-1 stock split carried out in the middle of last year.
Today, the company is worth US$2.4 trillion and that’s no doubt down to the power of its “hardware + software” ecosystem.
Due for a catchup
In fact over the past five years, Apple stock is up nearly 500% (see below) and has been one of the most consistent performers in the “Big Tech” cabal.
Yet so far in 2021, it’s actually been a relative underperformer versus its peers. Apple shares are only up 10.7% this year, versus a 16.8% positive return for the S&P 500 Index.
Compare that to the year-to-date gains for Facebook Inc (NASDAQ: FB), up 28.5%, Alphabet Inc (NASDAQ: GOOGL), up 44.9%, Microsoft Corporation (NASDAQ: MSFT), up 27.4%, and Amazon.com Inc, up 17.1%, and it’s clear that Apple has come catching up to do.
It’s not down to anti-trust concerns, as all fellow tech giants (bar Microsoft) face them. So, is it purely a function of it being a victim of the “rotation into value” trade so far this year?
I’d say so. Apple is an absolute giant of the tech scene, with an equally impressive product portfolio that looks set to keep growing no matter what happens.
For long-term investors wanting to buy a quality company, and looking for shelter from volatility in global stock markets, Apple could be just what the doctor ordered.
Apple share price 2016-2021 (US$)
Source: Google Finance
Disclaimer: ProsperUs Head of Content Tim Phillips owns shares of Microsoft Corporation.