Anthony Frausto-Robledo (afrausto@architosh.com)

20 Apr 2001

AAPL - Where is Apple's stock going?

Curious about Apple's stock price? Thinking about buying a few shares? Is this the right time? If you are wondering where Apple's stock is headed you are not alone. And the opinions on Wall Street vary.

APPL vs NASDAQ

Being a visual person I took a comprehensive graphical look at Apple's stock vs. the NASDAQ over the last ten years and since Apple's start. The ten year comparison is very interesting to review.(You can see it in a seperate window by clicking on this link)

If you can take a look at it you can see a couple of interesting things. First, relative to the whole technology industry growth on the NASDAQ Apple began to move counter to this overall trend starting in about 93' with a sharp drop. There was some recovery during the PowerPC transition era where Apple succeeded in a successful OS transition, but after that peak Apple declined while the NASDAQ took off, headed up at an impressive rate.

Two Interesting Points About Then and Now

First, Apple is again living through those OS transition years and so far things seem to be going great. This time it is much bigger of an OS change but some fundamentals remain. Like the last period there is going to be a substantial benefit to the user (we are finally getting our Modern Mac OS) and this will likely drive hardware sales, especially on the multiprocessor front where OS X can really shine.

The second point is that the tech industry may have just past its current low point and that the movement from here on may be a steady upward climb, not as aggressive as the late 90's perhaps but possibly more protracted and healthier (let's hope so at least). In looking at the "now" part of this one can see in the comparison that Apple's recent fall reflected the industry to a T, nothing more nothing less. But this time Apple has started to recover faster than the NASDAQ in general.

In looking at the one year graph you can see Apple's bottom was back in December when they warned Wall Street and took their medicine immediately. Since January Apple has been on the rise while the NASDAQ has been on the decline. Why is Apple trending upward ahead of the industry?

Some Closing Thoughts

There are a number of reasons why Apple is doing better than most expect and trending upward ahead of the NASDAQ (take a look at the six month graph, unbelievable folks). I covered some of those yesterday in a separate article. Apple at the moment is simply a better fit company than most PC makers. In fact, they probably are the best fit.

They are the best fit because they ARE the R&D department for the rest of the PC industry and that industry is languishing because it doesn't know what to do next. When it comes to charting new territory Apple is by far the most talented of the bunch...really a lot like a 'Tiger Woods of the PC industry'. They are the player to beat and as such get the same type of jealous resentment and undeserving skepticism from critical onlookers.

So take a look at the macro view of Apple relative to the whole tech industry and NASDAQ, and tell me what you think ..where is Apple's stock headed? I think you will see that despite some real shortcomings in Apple's arsenal—like chip speed bragging rights—they are clearly able to sled uphill when they have to. What other company like Apple could do that?