One of the most exciting days of the year for market observers and tech enthusiasts alike is the Apple (NASDAQ:AAPL) launch event.
Every year, Apple unveils a suite of new products and services at its annual launch event, headlined by the latest and greatest iPhone models. Tech enthusiasts ooh and aah. Market observers pay attention to the potential implications. Analysts update their price targets on the stock. And, generally speaking, Apple stock gets a lot of attention.
But how does Apple stock normally fare under all that attention? And, more importantly, how will it fare this time around?
Historically speaking, Apple stock does quite well in the two months following launch events. That should repeat itself this time. While the valuation on Apple stock is somewhat stretched, the new batch of reportedly lower price iPhones should spark huge demand. That huge demand should follow through into big holiday season sales for Apple. Coupled with continued robust Services growth, that should power Apple stock higher into the end of the year.
Investment takeaway? Buy Apple stock because this launch event could spark a healthy multi-month rally into the end of the year.
Apple Historically Does Well After Launch Events
There’s a chart making the rounds today ahead of the launch event that details how Apple stock normally does after new iPhone releases. The answer? Quite good.
Since 2007, there have been twelve iPhone launch events. In nine out of those twelve launch events, Apple stock traded higher sixty days later. Only three times since 2007 has Apple stock traded lower sixty days after an iPhone launch event.
Moreover, throughout all 12 iPhone launch events, Apple stock averaged a near 2% gain over the subsequent sixty days. Excluding the negative launches, Apple stock’s average gain in the subsequent sixty days is just shy of 7%.
Thus, history tells us two things: 1) Apple stock normally performs well after iPhone launch events, and 2) when Apple stock does head higher after a launch event, it heads higher by a meaningful amount.
Apple Could Do Much Better This Time Around
History should repeat itself this time around. Indeed, I think over the next sixty days, Apple stock could test historical highs and rally 10% or more after the launch event.
My bullishness here is predicated on the fact that the biggest reason consumers didn’t buy the iPhone X in droves was because of the $1,000 price point. This new wave of iPhones will presumably feature many of the X’s perks, like edge-to-edge display and face recognition, but will also have much lower price points. In lowering those price points, Apple is removing the one biggest obstacle which kept many consumers from buying the iPhone X.
As such, while I think a lot of people waited on the sidelines last year when it came to iPhone upgrades, I also think that all those people who did wait will rush to upgrade this year at more reasonable prices. After all, edge-to-edge display is the new mega-trend in smartphones, and now that the trend is a year old, smartphones that aren’t edge-to-edge display are starting to feel a bit antiquated.
For all these reasons, I think this next iteration of edge-to-edge iPhones will be met with huge demand. That huge demand is coming at a time when consumer confidence is at all-time highs, retail sales are surging, and the economy is vigorous. Thus, it seems like Apple is positioned for a huge holiday season, the likes of which should power Apple stock higher into the end of the year.
Bottom Line on Apple Stock
Apple stock historically does well following iPhone launch events. This time should be no different. If anything, it should be better, as pent-up demand will converge with strong economic fundamentals. As such, Apple stock should head materially higher into the end of the year.
As of this writing, Luke Lango was long AAPL stock.
