One of the things an investor can count on is that Apple (NASDAQ:AAPL) rarely stumbles. And when it does, the dip seldom lasts long before it returns to growth. Looking back at the few instances in the past five years when AAPL stock suffered a drop — followed by a speedy recovery — these lulls represent a buying window. They offer a rare opportunity to pick up shares in the world’s hottest tech giant at a discount.
Currently trading in the $115 range, Apple stock has begun to recover from the worst of the September tech stock selloff. A few weeks ago, shares were worth less than $107. However, there’s still a way to go before recovering to Sept. 1 levels.
Not convinced Apple is going to bounce back this time? Let’s examine the previous dips the company has had to face in the past years — and its subsequent recoveries.
AAPL Stock in Fall 2018
At the end of September 2018, Apple shares were trading at over $56. The month before, the company had hit a $1 trillion market capitalization — a huge milestone. But after that celebration, investors began to worry. Global smartphone sales had fallen, and trade relations between the U.S. and China were starting to deteriorate. In November, the company reported its fourth quarter earnings, with flat iPhone sales and lower-than-expected projections for the holiday sales quarter.
This spooked investors. Worse, the company announced it would stop breaking out unit sale numbers for iPhones and other hardware. Some saw this as an omen that iPhone sales were about to go into free fall.
Between the end of September and the end of December, Apple had lost one third of its value. But by the start of the new year, it was in recovery mode.
The next big drop occurred before Apple shares had fully recovered from the fall 2018 hit. In May 2019, the trade war between the U.S. and China had heated up. President Donald Trump announced he would raise tariffs on $200 billion in Chinese goods. Analysts began to worry that the dust-up would hurt Apple’s revenue from the Chinese market. Apple lowered its 2019 revenue guidance, and UBS warned investors:
“China obviously remains very important to Apple and will likely be a drag to overall growth.”
Apple shares ended May 2019 at $43.77, a 17% drop over the course of the month. However, investors who snapped up AAPL stock during this dip were soon laughing. By September, the stock had fully recovered and was back in roaring growth mode. This has continued until February of this year, when the stock topped $81.
This spring saw Apple take another dip. The novel coronavirus pandemic triggered anxiety along with a record-setting market meltdown. By March 23, Apple shares had closed at $56.09, a drop of 31% from its February highs.
But once again, investors who bought AAPL during this dip were richly rewarded. On Sept. 1, Apple closed at $134.18. This meant that if you bought shares in late March, your investment gained 139% in value — a pretty impressive performance for such a massive company within just six months.
Bottom Line on Apple
That takes us to now. With over 16% upside from today’s prices before it even recovers to Sept. 1 levels, the stock is showing all the signs of a recovery. And in a matter of weeks, there’s going to be a big catalyst for growth when the 5G iPhone 12 launches. That means your window to pick up AAPL stock at a discount is closing soon.
Or at least until the next cyclical drop. But by then, those “cheap” shares are going to cost a lot more than if you move now.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.