The launch of the iPhone 16 series in September 2024 once again put Apple Inc. (AAPL) in the spotlight. However, the stock had a muted reaction following slower-than-expected sales of the updated release.
This raises an important question for AAPL investors: Does the stock go up when iPhones are released? In this article, we’ll explore the relationship between iPhone releases and Apple’s stock performance.
Key Takeaways
- Apple’s stock often has volatility on iPhone launch days, including a short-term “sell the news” effect.
- Post-launch, successful new product releases can act as catalysts for stock growth.
- The new series for Apple’s iPhones typically launches annually in the Fall.
- Multiple factors beyond product launches influence Apple’s overall stock performance.
- Investors should always consider both short-term fluctuations and long-term trends.
How Do iPhone Releases Impact Apple’s Stock?
Historically, Apple’s stock has exhibited mixed reactions to iPhone launch events. In the lead up to a new upgrade, the stock may rise, but on the day of the announcement, the stock often underperforms the market or experiences a slight decline. This phenomenon can be attributed to the “buy the rumor, sell the news” effect, which reflects the market’s tendency to price in expectations before major announcements (even positive ones).
However, after the initial dip, product releases serve as catalysts for subsequent stock increases. This pattern suggests that while short-term traders might see volatility around launch dates, long-term holders often benefit from sustained growth following successful product updates or introductions.
Investors should pay close attention to the days before and after a new product launch to gauge its demand. Positive reception and strong initial sales figures can drive the stock upward, while disappointment or production issues can lead to declines.
52%
Apple iPhone sales account for half of all revenues for the company.
As the AAPL price chart above illustrates (using a logarithmic price scale), Apple’s stock fluctuated around iPhone launch periods. While not every launch correlates with immediate stock growth, the trajectory has been positive, reflecting the company’s continued market dominance.
What Other Factors Affect Apple’s Stock?
In fact, after some releases, the stock remained flat or declined for several months before continuing its broader bullish trend. This is because, while important to the company, the iPhone is just one part of Apple’s overall portfolio.
While new iPhone features grab headlines, investors are increasingly focused on Apple’s services growth and its potential in emerging technologies like AI.
Various products and services beyond the iPhone contribute to Apple’s revenue and stock performance. These include the Mac lineup, iPads, Apple Watch, AirPods, and services like the App Store, Apple Music, iCloud, and Apple TV+ streaming service. The company’s ecosystem creates multiple revenue streams, reducing reliance on any single product. Apple has also been attempting to derive a more significant proportion of its revenues from services since these are less reliant on the physical products that can be snarled by changing economic conditions, technological shifts, as well as inflationary, supply chain, and other pressures.
In 2023, Apple services accounted for more than a fifth, 22%, of all revenues. This has helped keep Apple’s stock price moving up over the years. The chart below shows its stock price and the change in the value of a $10k investment in Apple over 30 years.
While iPhone and other product launches are significant events for Apple, here are other factors that influence the company’s stock performance:
- Overall market conditions: Broader economic trends and market sentiment can impact Apple’s stock, regardless of product launches.
- Supply chain issues: Recent events, such as a 2024 fire at Tata’s Plant Apple factory in India, highlight how supply chain disruptions can affect production and, consequently, stock performance.
- Competitive landscape: Competition in the smartphone and technology sectors often shifts Apple’s market position. Samsung Electronics Company Ltd. (SSNLF), Alphabet Inc. (GOOG), Huawei, and other companies make high-performance phones and mobile devices competing with the iPhone.
- Financial performance: Quarterly earnings reports, revenue growth, and profit margins are crucial in determining stock value.
- Geopolitical factors: Trade tensions, regulatory changes, and global economic shifts can impact Apple’s operations and stock performance.
- Introduction of new product categories: Announcements or rumors about new product categories often have driven moves in Apple’s stock price.
Who Owns the Most AAPL Stock?
Is AAPL a Buy, Hold, or Sell?
As of the fourth quarter of 2024, 32 out of 38 analysts covering the stock have a “buy” or “strong buy” recommendation on AAPL stock, with an average near-term price target of around 5% to 7% higher than the present share price.
When Is the iPhone 17 Coming Out?
Apple usually releases its newest iPhone series in the Fall (September or October) of each consecutive year. The iPhone 16 was released in September 2024, so the iPhone 17 should be released in the Fall of 2025. For the most accurate information, keep an eye on official announcements from Apple.
The Bottom Line
Apple’s annual iPhone release, typically in September, often creates a buzz in the stock market. Investors closely watch these events, as the iPhone remains Apple’s flagship product and a significant revenue driver. However, the stock’s performance during this period isn’t always predictable. While positive reception to new iPhone features can boost share prices, the stock sometimes experiences a “buy the rumor, sell the news” effect, where prices rise in anticipation but dip after the announcement.
Several factors influence Apple’s stock around iPhone launches. These include pre-order numbers, analyst projections, and broader market conditions. Supply chain issues or production delays can also impact investor sentiment. Apple’s stock performance is increasingly tied to its growing services segment and other product lines, not just iPhone sales. Potential investors should consider Apple’s overall financial health, competitive position, and long-term strategy rather than focusing solely on iPhone launch events.