Apple Stock This Week: Winning Streak Is Over

Daniel Martins

For a while this year, Apple managed to outperform the broad market, its industry and even the FAAMG group consistently. Just ahead of earnings, the tables have started to turn.

For the week ended July 24, Apple’s share price dipped 4% against an S&P 500 that declined much more timidly. The stock also underperformed FAAMG ex-Apple for the week, by about 3 percentage points.

Why Apple stock headed lower

The list of bearish news this past week was pretty extensive. For starters, “sell-side love” gave way to “tough love”, to put it nicely. It all started with Goldman Sachs’ analyst Rod Hall, the only official Apple bear on Wall Street until recently.

He came out with his earnings preview on Thursday, making the following arguments:

  • Next year’s earnings will fall below current expectations due to slowing unit sales, average prices, and unit growth.
  • Apple will not provide guidance for the September quarter due to the pandemic uncertainties and the potentially delayed 5G iPhone release.
  • A one-month iPhone delay would reduce holiday revenue sales by about 7% and EPS by 6%.

Bearishness was reinforced the very next day, when Wolfe Research initiated on Apple with a “sell” rating. Having two bears come up to the microphone within a mere 24 hours did not help the stock. Between the close of trading on Wednesday and Friday’s open, Apple stock went from flat for the week to down more than 6%.

The problems did not end there, however. On the regulatory front, Apple was put under the microscope by Texas and other US states for allegedly deceiving customers. Hanging over investors’ heads is likely to be next week’s meeting with Congress, in which Big Tech will be questioned over antitrust matters.

Combine all the above with valuations that had reached decade-long highs earlier in July, and one can appreciate why Apple shares have dipped sharply.

AAPL Snapshot

The table below summarizes Apple’s stock returns over different periods, compared to the performance of its sector and the broad market.

All the numbers, tables and graphs in this article have been provided by Stock Rover, my favorite source for data and insights on stocks, ETFs and markets. Check out the platform and sign up for as little as $7.99 per month. The very affordable Premium Plus plan that I currently have will give you access to all the information that went into my analysis, and much more.

(Disclaimers: the author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)

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