Apple’s shares are rolling higher again as investors get excited about the latest round of product launches, including a hotly-anticipated 5G phone, but the stock’s history suggests that the markets have a classic habit of buying on the rumour and then selling (or at least pausing for breath) after the fact, says Russ Mould, AJ Bell Investment Director.
“In the six months before the firm’s eight previous major generational product launches, dating all the way back to the original iPhone in 2007, Apple’s shares have risen by an average of 20%, only to then pretty much flat-line for the six months after launch, with an average advance of just 4%. They have then tended to start motoring again in anticipation of future product upgrades and how they drive fresh sales of phones and – increasingly – consumption of apps and content.
“The potentially tricky bit this time is the degree to which Apple has already surged ahead of the new range of launches – the shares have racked up their biggest ever six-month capital gain ahead of a product release of almost 61%, compared to that long-run average of 20%.
“This could mean that a lot of the good news is already baked into the stock and its valuation even before the launch announcement from chief executive officer Tim Cook.”