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?
Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.
He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer.
In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.