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Apple Stock: Santa Claus Disappointed, But What’s Next?

Historically, AAPL has done much better than usual around the Christmas holiday. This time, not so much. Here’s how the stock performed at the turn of the year, and what could happen next.
  • Apple investors had hoped for a Santa Claus rally in 2022, but the bearded man never showed up with their gifts.
  • The New Year could be much better for AAPL for reasons that range from macroeconomic to company-specific.
  • However, I also identify a few possible reasons why a 2023 rebound may not materialize in the end.
Figure 1: Apple Stock: Santa Claus Disappointed, But What’s Next?

Figure 1: Apple Stock: Santa Claus Disappointed, But What’s Next?

(Read more from the Apple Maven: 7 Fun Facts About Apple Stock In 2022)

Santa Claus Skipped AAPL Investors

Thanks for nothing, Santa!

In 2022, the so-called “Santa Rally” did not materialize at all. That was a disappointment after I had observed that Apple stock  (AAPL) - Get Free Report has historically done a good bit better than usual around the Christmas holiday.

Let’s revisit the relevant numbers:

  • Over any random five-day period since 2000, AAPL has returned an average of +0.64%.
  • In the five days leading up to Christmas, the average has been 30 bps better: +0.94%.
  • The five-day returns following Christmas have averaged an impressive +1.68%.

This holiday season, the returns in Apple stock have been far less impressive:

  • In the week prior to Christmas, AAPL was down -2.0%.
  • In the week following Christmas, was down -5.1%.
Figure 2: Apple vs. S&P 500 performance during holiday season.

Figure 2: Apple vs. S&P 500 performance during holiday season.

Fun fact: in the ten trading days around Christmas, Apple stock was down for the session seven times. Towards the end of that period, shares set a new 18-month low at about $125.

Maybe Santa got stuck in traffic this year.

But It’s Time To Look Forward

Apple investors should not worry too much, however. First, a handful of bad days in the market is par for the course – especially during these turbulent times.

Second, I think that 2023 will be a better year for the stock. Here is the list of reasons why I believe this to be the case, followed by a shorter list of potential risks to a rally never materializing in the new year.

Apple stock could rally because:

  • A recession is likely priced into stocks already, at least to an extent.
  • Consumer prices are expected the stabilize, holding interest rates steady.
  • We may have already seen the worst of the supply chain overhang.
  • A mixed reality device is likely to be announced, and estimates could rise.
  • It has been rare for Apple stock to have two materially negative years in a row.

On the other hand, here’s why a rally may not happen in the end:

  • The first signs of inflation moderation have surfaced, but stocks keep hurting.
  • A global recession, whether mild or severe, is becoming more likely by the day.
  • Missed iPhone sales in the holiday quarter due to supply issues may have been lost forever.
  • AAPL is still up 195% for the past five years, more than any other FAAMG peer. Maybe the stock still has room to correct.

(Disclaimers: this is not investment advice. 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)