Apple’s market cap has climbed more than $13 billion this year alone, equal to the company’s entire net worth in mid-2004. But that’s still enough to make it an underperformer next to its tech titan peers.
In a Wednesday report, the Wall Street Journal notes that Apple has risen 1.3% in 2021 so far. That’s compared to an average of 16% for Microsoft, Amazon, Facebook, and Google parent company Alphabet. It’s also way less than the 81% Apple soared in 2020.
The report notes:
“Some of Apple’s recent weakness can be chalked up to a natural correction for a stock that soared 81% in 2020, putting the shares to a record-high multiple of around 33 times forward earnings. But Apple also has the additional challenge of coming off its strongest seasonal quarter that featured its first 5G iPhone and updates across most of its other product lines. That has left investors wondering what’s next.”
Challenges in Apple’s future
The report notes that Apple’s share price is also dented by the fact that it pulls the majority of its revenue from devices which rely on chips, currently at the mercy of a global semiconductor shortage. It means that Apple supplies could be constrained this year. Another issue is the battle with Epic Games, which could affect the App Store, part of the Services division Apple increasingly relies on.
In all, it seems kind of crazy that Apple would be lagging behind its rivals during a time when it’s arguably got the hottest iPhone in its history on its hands. Pair that with Apple Silicon Macs and Apple’s product line is looking better than it has in years — and it didn’t look bad before.
As the publication reports, a lot is going to be made of what Apple shows off next week at its April 20 event. If Apple can blow people away with its unveilings, AAPL could soar again. If it doesn’t dazzle, prices could continue to languish. (Of course, your definition of languishing and Apple shareholders’ definition may differ.)
For comparison, Apple is currently valued at $2.25 trillion. Microsoft is at $1.95 trillion. Amazon is at $1.71 trillion. Facebook is at $880 billion. And Alphabet is at $1.52 trillion. That makes Apple the only tech giant currently above the $2 trillion mark.
Source: Wall Street Journal