The tech giant has been a fantastic investment over the past two decades.
Without a doubt, Apple (AAPL -1.22%) is one of the best businesses in the world. And even Warren Buffett recognizes this as Berkshire Hathawaycurrently has a stake in the tech giant worth $179 billion. Buffett initially bought shares of Apple in the first quarter of 2016.
But if you were smart enough to invest $1,000 in Apple stock at the start of the year 2000, you'd be sitting on a monster gain of 21,230%. This means that modest investment would be worth a whopping $213,000 today (as of July 27).
Let's take a closer look at the key product and service introductions that helped drive Apple to its current market capitalization of over $3 trillion, making it the most valuable company on the planet.
Image source: Statista.
A storied history of innovation
Apple wasn't always the flourishing company that we are all familiar with. In fact, it was actually struggling at the turn of the century, until the introduction of the iPod in 2001 put the business back on the map and made it a force to be reckoned with in the market for consumer electronics. The iPod had a wonderful run, lasting 21 years. Apple discontinued the music player last year.
Look at the chart above and you'll see Apple's history is full of game-changing hardware products. The iPhone, which some might consider the single greatest innovation in corporate history, is what catapulted the company to become dominant on a global stage. Since 2007, when the first iPhone was launched, Apple has made dozens of upgrades, all with incredible consumer demand. In fiscal 2022, the iPhone represented 52% of overall company revenue, so it remains the core contributor to Apple's success.
Besides the iPad, Watch, AirPods, and new MacBooks, the innovation engine continues humming along. Apple recently showcased its Vision Pro headset, potentially setting the foundation for making the company a formidable competitor in the AR (augmented reality) and VR (virtual reality) markets. There are also rumors swirling that Apple is working on an autonomous vehicle. If these more far-fetched ideas become hits like previous products, then Apple's market cap could be much higher than it is right now.
Moreover, Apple has done a wonderful job in recent years of growing its Services segment, which accounted for 20% of company sales last fiscal year. This division offers things like Pay, TV+, Music, and iCloud. The high-margin recurring revenue it produces is all the proof you need to understand how management is finding more ways each year to monetize its massive global user base.
Should you buy Apple right now?
Due to its size and impressive history of financial performance, investors are already familiar with Apple. Even in the last five years, the stock has risen 300%, crushing the broader Nasdaq Composite Index by a wide margin.
There are easy arguments to be made for why one would want to invest in Apple right now. For starters, the business has a top-notch balance sheet with $166 billion of cash, cash equivalents, and marketable securities. Plus, Apple consistently produces tons of free cash flow.
Then, there's the strong brand, which is bolstered by the popular products I discussed earlier. The company's focus on the Services segment only expands the ecosystem, while keeping users locked in. Apple's customer loyalty is also hard to understate.
But investors should be mindful of the current valuation. Apple stock trades at a price-to-earnings (P/E) ratio of 33 as of this writing, propelled by the share price rising 50% in 2023 alone. That valuation is significantly more expensive than Apple's trailing 10-year average P/E multiple of 20.
Plus, there's always the company's huge scale to think about. Apple generated nearly $400 billion in fiscal 2022 revenue. Wall Street analysts forecast just 5.7% annualized revenue growth over the next five fiscal years. Even a company with this kind of pedigree can only move the needle so much from year to year. After two-plus decades of blistering growth, investors should temper their expectations going forward.
Neil Patel has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.
FAQs
But if you were smart enough to invest $1,000 in Apple stock at the start of the year 2000, you'd be sitting on a monster gain of 21,230%. This means that modest investment would be worth a whopping $213,000 today (as of July 27).
How much was Apple stock worth in 2000? ›
The closing price for Apple (AAPL) in 2000 was $0.22, on December 29, 2000. It was down 71.6% for the year. The latest price is $194.37.
What happens when you buy $1 of stock on Cash App? ›
When you buy $1 of stock on Cash App, you're essentially purchasing a fraction of a share in a company. Cash App allows you to invest in fractional shares, meaning you can buy a portion of a stock rather than a whole share.
How much money would I have if I invested in Amazon 20 years ago? ›
Which brings us to what $1,000 invested in Amazon stock 20 years ago would be worth today. As you can see in the above chart, if you had invested $1,000 in Amazon stock a couple of decades ago, it would today be worth about $90,500. That's good for an annualized total return of 25.3%.
What is Apple's rate of return on investment? ›
AAPL's ROI over the last five Years
| AAPL Annual Return On Investment | (Sep 30 2023) 2023 | (Sep 25 2021) 2021 |
|---|
| Y / Y Investment Growth | 4.28 % | 3.22 % |
| Y / Y Net Income Growth | -2.81 % | 64.92 % |
| Annual Return On Investment | 46.8 % | 41.98 % |
If you had invested $1,000 in Apple stock on Jan. 9, 2001, today, you would have $604,588, 23 years later. On the other hand, a similar investment in the Nasdaq index would be worth $6,080, and the S&P 500 worth $3,662. Since their launch, the iTunes software as well as the music store have come a long way ahead.
How much money did Apple make in 2000? ›
History
| Fiscal Year End | Revenue | Change |
|---|
| Sep 27, 2003 | 6.21B | 465.00M |
| Sep 28, 2002 | 5.74B | 379.00M |
| Sep 29, 2001 | 5.36B | -2.62B |
| Sep 30, 2000 | 7.98B | 1.85B |
28 more rowsBalance limits
Your Cash App balance stores any funds you receive or add to your account. If you haven't verified your identity, your balance limit is $1,000. After verifying your identity, you'll have an unlimited cash balance.
What happens if I buy $1 of bitcoin on Cash App? ›
* Your $1 worth of Bitcoin will be stored in your Cash App Bitcoin wallet. * You can view your Bitcoin balance and current price at any time in the Cash App. You can also buy, sell, or send your Bitcoin from within the app.
What if a stock goes below $1? ›
When a stock's price falls to zero, a shareholder's holdings in this stock become worthless. Major stock exchanges actually delist shares once they fall below specific price values. The New York Stock exchange (NYSE), for instance, will remove stocks if the share price remains below one dollar for 30 consecutive days.
Amazon stock is currently trading at roughly $172 per share. Around the same time 10 years ago in late April 2014, it was trading at about $16.50. According to Zacks Equity Research, a $1,000 investment in mid-March 2014 would have been worth $9,565.47 in the middle of last month for a gain of 856.55%.
What if I invested $10,000 dollars in Amazon in 1997? ›
If you had invested $10,000 in Amazon at its IPO price in 1997, you would have purchased 555 shares, not including commission expenses or fractional shares. Taking into account Amazon's four stock splits, these 555 shares would have multiplied into 133,200 shares, as of today.
Has Amazon stock ever been $2,000? ›
Amazon (AMZN) crossed $2,000 per share for the first time on Thursday morning as the e-commerce giant heads toward a $1 trillion market cap. The stock ended the day at $2,002.38.
What is the 5 year average return of Apple stock? ›
Five Year Stock Price Total Return for Apple is calculated as follows: Last Close Price [ 192.25 ] / Adj Prior Close Price [ 42.24 ] (-) 1 (=) Total Return [ 355.1% ] Prior price dividend adjustment factor is 0.97.
What is the risk level of investing in Apple? ›
Risk Analysis of Apple Inc ( AAPL | USA)
"The Risk Score is a relevant measure for the assessment of a stock attractiveness. Apple Inc shows a Risk Score of 9.00. 0 corresponds to a very high risk and 10 corresponds to a very low risk."
Is 7% a good return on investment? ›
General ROI: A positive ROI is generally considered good, with a normal ROI of 5-7% often seen as a reasonable expectation. However, a strong general ROI is something greater than 10%. Return on Stocks: On average, a ROI of 7% after inflation is often considered good, based on the historical returns of the market.
How much is $10,000 invested in Apple 20 years ago? ›
Those gains translate to a 36.6% compound annual growth rate for Apple compared to a 7.4% CAGR for the S&P 500 in that time. That means that $10,000 in AAPL stock purchased 20 years ago would be worth about $5.08 million today, assuming reinvested dividends.
What would $1000 invested in Apple in 1997 be worth today? ›
If you had invested $1,000 in Apple stock on Feb. 4, 1997, today, you would have $1,343,269. Likewise, if you had invested $1,000 in an index fund replicating Nasdaq, you would have $11,038. A similar $1,000 investment in an index fund that replicates the S&P 500 would be worth $6,140.
What would $1000 in Apple stock in 1984 be worth today? ›
The $1,000 investment in Apple stock at the time would be worth $1,455,538.90 today, based on a price of $189.22 for Apple at the time of writing.
What if I invested in Apple 10 years ago? ›
Ten years ago, at market close on March 28, 2014, Apple's stock was trading at $16.85 per share. This means that $100,000 invested in Apple in March 2014 would be worth more than $1 million today.
