August has been a challenging month for the stock market, and Apple (ticker: AAPL) has not been immune to this downturn. As of the close on Friday, the Nasdaq Composite had experienced a 5.3% decline in August, marking its worst monthly performance of the year, as reported by Dow Jones Market Data. Meanwhile, Apple saw a significant drop of 9.1%, marking its first monthly decrease in 2023.
To put this into perspective, Apple has underperformed the Nasdaq Composite by 3.8 percentage points so far this month, which could potentially be the largest monthly underperformance since November 2022.
One of the factors contributing to Apple’s stock decline was the news in early August that its sales had fallen 1% from the previous year in the quarter ending July 1. This decline was primarily attributed to a drop in iPhone sales, which is Apple’s primary revenue driver. During a call with analysts and investors to discuss the results, Apple’s management acknowledged that there had been a decline in the U.S. smartphone market over the past few quarters.
Chief Financial Officer, Luca Maestri, stated, “Products revenue was $60.6 billion, down 4% from last year, as we faced foreign exchange headwinds and an uneven macroeconomic environment.”
However, amidst these struggles, there is reason for optimism. The highly anticipated release of the iPhone 15 is set to take place next month. This launch could potentially rejuvenate Apple’s stock and restore investor confidence.
Despite its recent setbacks, Apple remains a company with immense potential and a track record of innovation. Investors and technology enthusiasts eagerly await the unveiling of the iPhone 15, hoping for a resurgence in Apple’s performance in the months to come.
Key Takeaways:
- Apple stock has underperformed the Nasdaq Composite in August.
- The decline in Apple’s stock is mainly attributed to a drop in iPhone sales.
- The launch of the iPhone 15 next month is expected to boost Apple’s performance.
- Despite the recent challenges, Apple’s potential for growth and innovation remains strong.
Smartphone Shipments Decline in Q2, but Apple’s iPhone 15 Brings Hope
Market research firm International Data Corporation (IDC) recently reported a 6.8% decline in worldwide smartphone shipments for the second quarter compared to the previous year. This marks the eighth consecutive quarter of contraction for the smartphone market, attributed to soft demand, inflation, macroeconomic uncertainties, and excess inventory.
However, there is optimism on the horizon with the highly anticipated release of Apple’s newest iPhone, the iPhone 15, slated for September. As ‘s has previously highlighted, Apple stock historically experiences gains in the months following a phone launch, and this trend could repeat itself after the iPhone 15 hits the market.
According to a research note by Evercore ISI analyst Amit Daryanani on Aug. 18, the iPhone 15’s design and feature updates are expected to drive device refresh and result in a higher average selling price (ASP). Daryanani believes that these changes will not only convince consumers to spend more but also persuade them to opt for the Pro models over the base models. He rates Apple stock at Outperform with a price target of $210.
Another analyst, Dan Ives from Wedbush, shares a similarly optimistic outlook. In his note on Aug. 15, Ives expects a $100-$150 price increase for the iPhone 15 Pro/Pro Max version. He believes this price hike will be well-received by many upgrade customers, especially with major carrier promotions. Ives estimates that there are approximately 240 million iPhones worldwide that have not been upgraded in over four years. He rates Apple stock at Outperform with a target price of $230.
With the forthcoming release of the iPhone 15, Apple aims to not only stem the decline in smartphone shipments but also strengthen its financial position through higher-priced models and increased consumer spending. As consumers eagerly anticipate the new iPhone, industry experts remain bullish on Apple’s prospects.
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