Apple (AAPL) stock is back to trading at record levels, but then long-term shareholders should be used to such milestones. After all, they've enjoyed pretty much incomparable returns over the past few decades.
From January 1990 through December 2020, AAPL stock created $2.67 trillion in shareholder wealth, or an annualized dollar weighted return of 23.5%, according to an analysis by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University.
Indeed, per Bessembinder's findings, which account for a stock's increase in market value adjusted for cash flows in and out of the business and other adjustments, Apple was the best stock in the world over those 30 years.
True, AAPL stock traded sideways for the first few years of the 21st century, but an explosion of innovation soon put an end to that. Under the visionary leadership of the late Steve Jobs, Apple essentially reinvented itself for the mobile age, launching revolutionary gadgets such as the iPod, MacBook and iPad.
But what really set Apple on its course to becoming the world's second largest publicly traded company – and one of hedge funds' favorite blue chip stocks – was the 2007 debut of the iPhone.
Today, Apple isn't just a purveyor of gadgets; it sells an entire ecosystem of personal consumer electronics and related services. And it's a sticky ecosystem at that.
No less an eminence than Warren Buffett has called the iPhone maker Berkshire Hathaway's (BRK.B) "third business," noting Apple fans' fantastic brand loyalty as one reason for being all-in on the stock. (Apple accounts for more than 40% of the value of the Berkshire Hathaway equity portfolio.)
True, Berkshire Hathaway cut its Apple stake in Q1, but that was because the holding company believes that corporate taxes are likely to rise at some point in the future. Bulls needn't worry about Berkshire losing its taste for the stock. Warren Buffett adores Apple as much as ever.
Over the past 20 years Apple stock generated an annualized total return (price change plus dividends) of 35.7%. By comparison, the S&P 500 delivered an annualized total return of 10.5% over the same span.
What does that look like on a brokerage statement? Check out the above chart and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth almost $448,000. The same $1,000 invested in the S&P 500 would theoretically have turned into about $7,300 over the same period.
For those wondering if Apple stock is a buy at current levels, Wall Street mostly thinks so. Of the 45 analysts covering AAPL surveyed by S&P Global Market Intelligence, 24 rate it at Strong Buy, seven say Buy, 12 have it at Hold and two say it's a Sell.That works out to a consensus recommendation of Buy, with fairly high conviction.
What does that look like on a brokerage statement? Check out the above chart and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth almost $448,000. The same $1,000 invested in the S&P 500 would theoretically have turned into about $7,300 over the same period.
Those gains translate to a 36.2% compound annual growth rate (CAGR) for Apple compared to an 8.5% CAGR for the S&P 500 in that time. That means that $10,000 in AAPL stock purchased 20 years ago would be worth more than $4.85 million today, assuming reinvested dividends.
If one had bought $1,000 in Apple stock when Jobs returned in February 1997 and held on until today, that position would be worth around $1.8 million. That figure assumes this hypothetical investor would have reinvested their income from the dividend, which Apple reinstated in 2012.
If you had invested $1,000 in Apple stock on Jan. 24, 1984, today, you would have $1,593,809. Likewise, if you had invested $1,000 in an index fund replicating Nasdaq, you would have $55,090. A similar $1,000 investment in an index fund that replicates the S&P 500 would be worth $29,230.
Monday marked the 20-year anniversary of Google's IPO. The stock has appreciated over 6,500% since then. In other words, if you invested $1,000 in Google at its closing price on Aug. 19, 2004, your shares of Alphabet, now the search giant's parent, would have been worth $66,521.70 as of Monday's close.
The table below shows the present value (PV) of $1,000 in 20 years for interest rates from 2% to 30%. As you will see, the future value of $1,000 over 20 years can range from $1,485.95 to $190,049.64.
Buying $100 In AAPL: If an investor had bought $100 of AAPL stock 20 years ago, it would be worth $36,484.71 today based on a price of $167.96 for AAPL at the time of writing.
Those gains translate to a 23.2% compound annual growth rate for Amazon compared to a 6.2% CAGR for the S&P 500 in that time. As a result, $10,000 in AMZN stock purchased 20 years ago would now be worth $645,262. A $10,000 investment in the S&P over the same period, however, would amount to $33,452.
AAPL has been an exceptional investment. Since its IPO over 40 years ago, it has generated extraordinary returns. In the past five years alone, AAPL has increased by more than 340%. The iPhone is at the heart of Apple's sales.
Currently, Microsoft has a market capitalization of $3.07 trillion. Buying $1000 In MSFT: If an investor had bought $1000 of MSFT stock 20 years ago, it would be worth $16,279.07 today based on a price of $413.00 for MSFT at the time of writing.
And if you had invested $1,000 in Netflix a decade ago, it would have ballooned by more than 654% to $7,543 as of Oct. 17, according to CNBC's calculations.
An investor who bought $1,000 worth of Apple stock at the IPO in 1980 would have. The all-time high Apple stock closing price was 234.55 on July 16, 2024.
What does that look like on a brokerage statement? Check out the above chart and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth almost $448,000. The same $1,000 invested in the S&P 500 would theoretically have turned into about $7,300 over the same period.
The company's strong financial performance, innovative product pipeline, and expanding services segment are expected to drive this growth. By 2030, some estimates suggest that Apple's stock price could reach as high as $510, with more optimistic projections hinting at crossing the $1,000 mark.
Nvidia stock has delivered a total return of more than 27,000% over the last decade. That means that if you invested $1,000 in the stock 10 years ago and held onto your position, your holdings would now be worth more than $271,000. NVDA Total Return Level data by YCharts.
Introduction: My name is Merrill Bechtelar CPA, I am a clean, agreeable, glorious, magnificent, witty, enchanting, comfortable person who loves writing and wants to share my knowledge and understanding with you.
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