By In what can only be described as a challenging August, not even Apple can escape unscathed. Investors who are hoping for a rebound with the upcoming launch of the iPhone 15 may be in for disappointment.
If current trends continue, Apple will mark its worst month since December, with its stock down nearly 5% in the past 31 days. This is in stark contrast to the losses experienced by the S&P 500 and tech-heavy Nasdaq, which were only 1.4% and 1.9% respectively.
However, the most alarming statistics are yet to come. Apple is on track to end its longest monthly winning streak in nine years, as well as a seven-month winning streak, which is its longest since August 2014.
This difficult period is not exclusive to Apple alone; tech stocks across the board have been hit hard due to investor concerns over the Federal Reserve’s interest rate decisions. The uncertainty surrounding whether there will be a skip, pause, cut, or even another hike has left investors feeling uneasy.
Apple’s latest quarterly report did not help its cause either. Disappointing sales figures for the iPhone and iPad resulted in a negative reaction from Wall Street.
The burning question now is whether Apple’s fortunes will turn around in the near future. While investors desperately hope for a positive outcome, history suggests otherwise.
September has historically been the worst month for the stock market, and Apple is no exception. In fact, shares have dropped by at least 6% in each of the past three Septembers. Since the company’s inception 43 years ago, its stock has fallen an average of 4.2% every September. Out of all those years, Apple has seen gains in September only 14 times, remained unchanged once, and experienced losses 27 times.
To put things in perspective, the S&P 500 has seen a decrease in September on 23 occasions during the same time period. However, the average loss for the S&P 500 in September has been less than 1%.
As we approach September, Apple and its investors should brace themselves for potential turbulence in the market. Only time will tell if this year will be any different.
The iPhone’s Impact on Apple’s Earnings
The iPhone has long been Apple’s flagship product, with its sales often determining the success of the company’s earnings. However, it seems that not even the iPhone can completely change the current market situation, despite what investors may believe.
Historically, the month of September has seen underperformance in Apple’s stock, even during times of great excitement such as product releases. This trend is expected to continue this year, as the unveiling of the latest iPhone is set for September 12th.
While the immediate outlook may not be optimistic, analysts believe that there is hope for the longer term. They estimate that the new iPhone model will be attractively priced, with just a $70 increase compared to the original 2007 model when adjusted for inflation. This minor mark-up could potentially boost sales, especially among cautious consumers who are experiencing inflationary pressures.
In addition to the launch, September also brings an influx of actual iPhone sales. However, any positive impact on the stock will likely only occur when the company reports its quarterly earnings in late October.
Analysts have mixed opinions on whether there will be a significant increase in sales. UBS analysts, led by David Vogt, expressed concern over the risk to September iPhone revenue. They noted that based on July’s sell-through of 13.9 million units and a similar product mix as the previous quarter, there is an increased chance that iPhone revenue may fall below market expectations.
Despite these reservations, Wall Street remains optimistic about Apple’s prospects. The stock has received an average rating of Buy from nearly three dozen analysts surveyed by FactSet. Furthermore, the consensus target price suggests a potential gain of 7.5%. As investors eagerly await October, they can take comfort in this positive outlook.
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