Apple Stock: Should You Buy It In August?

Apple stock climbed in June and followed up with another strong month of performance in July. Will August be just as solid for shares of the Cupertino company?
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July has reached its end, and Apple stock  (AAPL) - Get Apple Inc. (AAPL) Report climbed for the fourth time in the past five months: up 7% this time. Shares are now solidly in positive territory for the year, after rising an impressive 80%-plus in 2019 and again in 2020.

However, investors may be feeling a bit uneasy about a slow-to-react share price, following outstanding fiscal Q3 results. Could AAPL continue to move higher in August?

Figure 1: AAPL monthly chart.

Figure 1: AAPL monthly chart.

(Read more from the Apple Maven: Chat With Wedbush’s Dan Ives: How To Think Of Apple’s Valuation)

AAPL: seasonality

It was interesting to see how little Apple moved after delivering one of the best quarters in the company’s history. It seems increasingly obvious that the gains in this stock were front-loaded in June and July, to an extent. This could be a bit concerning for the performance of AAPL in August.

As the chart below suggests, the current month has historically been one of the best for the stock in the past ten years. This is consistent with the idea that investor sentiment improves 3-6 months ahead of the iPhone launch and holiday season. The harder question to answer, however, is whether the typical optimism in August may have already been priced into shares.

Figure 2: Average monthly return (seasonality).

Figure 2: Average monthly return (seasonality).

AAPL: thinking longer term

But as I have argued in the past, Apple is probably a better stock to own for the long term, not one to trade. The Cupertino company has managed to shine across all product and geographic segments, both during the pandemic and the early recovery stages. It is hard to build a convincing bear case against the stock that is based on business fundamentals alone.

The expectations for Apple’s revenues and earnings in 2021 have improved noticeably in the past few weeks, prior to and after fiscal Q3 earnings. What has not is the share price. Better results coupled with stagnant price means that valuations have pulled back. This is good news for those looking for an entry.

For this reason, I remain on the fence about Apple stock’s performance in August. But regardless of near-term performance, I continue to believe that now is a good time to own shares for the long haul.

(Read more from the Apple Maven: Apple Stock Is Cheap, Here Is Why)

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Take your best guess: how do you believe Apple stock price will move in August?

Is the price right?

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(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)