Apple, Inc. AAPL the stock is down about 16.1% year-to-date. The decline is nearly in line with the performance of the broader market, with the S&P 500 index falling about 15.5% over the period. The tech-heavy Nasdaq Composite Index plunged 28.2% during the period.
How Apple generally does in the party district: The December quarter is Apple’s seasonally strong period, as it encompasses the holiday sales period. In fiscal 2021, the company earned about 30% of its revenue in the quarter. When hardware sales alone are considered, their share of total revenue jumps to over 32%.
The December quarter, which is the first quarter of Apple’s fiscal year, gains significance as the company usually launches the new iteration of its flagship product – the iPhone, in September or October. Shipments generally begin in the December quarter. This time around, iPhone 14 shipments began in mid-September, driving some of the sales into the September quarter.
Other factors to consider are the promotions and discounts available for the holiday shopping season, which makes Apple’s more expensive iPhones more affordable for users, likely increasing volumes.
Does the benefit seep into the stock: Using the past 10 years to analyze whether stronger sales translate into higher returns for Apple investors shows that the stock hasn’t moved much for most years. That said, the past three years have seen the stock rally strongly through year-end.
Here are the returns for Apple shares between the day after Thanksgiving and the end of the year:
Returns from the position entered now: A $1,000 investment in Apple at Friday’s closing price of $148.11 would yield 6.8 shares. Assuming the stock returns 0.55%, consistent with the 10-year average, it would trade at around $149 by year-end. This would mean that the 6.8 shares one currently owns are worth $1,013.20.
Headwinds abound: 2022 has proven to be a difficult year for Apple. Mid-quarter, the company stepped in and said it expected lower shipments of iPhone 14 Pro and iPhone 14 Pro Max due to production disruptions at its supplier. Hon Hai Precision Manufacturing Company Limited HNHPF main iPhone factory located in Zhengzhou, China due to new outbreaks of COVID-19.
Wedbush analyst Daniel Ives said in a recent note that high-end iPhone models are in short supply as shipping times stretch. He expects Black Friday weekend iPhone sales to be eight million units, up from 12 million units previously.
Moreover, the uncertain macroeconomic situation has pushed consumers on the defensive, prompting them to tighten their purse strings.
By the end of the year, Apple shares will likely trade in reaction to external factors, including economic data and the Fed’s decision in December, as well as the evolving COVID-19 situation in China. (its main production center).
Read next: How to buy Apple stock (AAPL)
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