Apple has been a great company and a great stock for a long time. My clients own it, and it has long been one of my favorite companies.
The stock is up 26% so far this year and finished Friday just shy of its all-time high. It has also been a big month for the company. On September 1, John Ternus took over as CEO from Tim Cook.
In this report I am going to cover three things. How the stock has done over the last five years. Who the new CEO is and what he means for the company. And how I plan to proceed.
A Great Stock for a Long Time
Here is how Apple has done over different stretches of time, dividends included. The longer you have owned it, the better it has looked. $10,000 invested five years ago would be worth about $23,800 today.
The trend, year by year
Apple has been up in five of the last six years, counting this one so far. The one down year was 2022, when rising interest rates pulled most stocks lower. Apple came back with a 49% gain the next year. That is all part of the game with a great company.
Meet the New CEO: John Ternus
Tim Cook ran Apple for 15 years and turned it into one of the most valuable companies in the world. He is not going far. Cook is now Executive Chairman, so he stays involved and keeps working with governments around the world.
Ternus is an Apple lifer. He joined in 2001, worked under Steve Jobs, and has spent 25 years building the products people actually use. He is an engineer, and he is known inside the company for sweating the small details.
He helped lead some of Apple’s best moves of the last decade, including the switch to Apple’s own chips inside the Mac. Cook called him “without question the right person to lead Apple into the future.”
I like this handoff a lot. It was announced in April, it was planned for months, and it keeps the company in the hands of people who know it best. The market seems to agree. The stock has hit new highs in his first month on the job.
The Business Is Strong
Ternus is taking over a company that is firing on all cylinders. In July, Apple reported its best June quarter ever. Sales grew in every part of the world, and iPhone, Mac and Services all grew by double digits.
3 Reasons I Expect Apple Stock to Keep Doing Well
A steady handoff
The new CEO knows the company inside and out, and Tim Cook is still in the building as Chairman. I expect the same discipline and the same focus on quality that made Apple what it is.
Exciting new products
The iPhone 18 went on sale September 19, and early demand has held up well even with a higher price. Next month Apple starts taking orders for the iPhone Duo, its first folding iPhone. A smarter Siri also arrived this month, and it has changed how a lot of people see Apple’s place in AI.
It keeps rewarding shareholders
Apple makes a lot of money, and it gives a lot of it back. It pays a dividend every quarter and buys back its own shares, which leaves each remaining share with a bigger slice of the profits.
Here Is My Plan
Apple will remain a core holding in client portfolios. We are staying the course. I expect the company to keep performing well, and I expect the stock to keep doing well with it.
The stock is not cheap. Right now you pay about $37 for every dollar of profit Apple is expected to earn next year. Great businesses often trade at prices like that and go on to do very well, so it does not scare me off. It can make the ride a little bumpier, and that is something I plan around.
Two dates are on my calendar. Orders for the iPhone Duo open October 16, and Apple reports its next quarter at the end of October. I will be watching both closely for my clients.
Over the years I have come to see that the best results come from owning great companies and giving them time. Apple has rewarded that patience for a long time. Stay invested, stay diversified.
Related Reading
As always, if my outlook changes, my clients and readers will be the first to know. I’ll be back with another update soon — have a great week!
Until next time,
