The shares of Apple (NASDAQ:AAPL) have declined by about 12% over the past month (about 21 trading days), trading at about $138 per share. This compares to the S&P 500 which remains down by about 10% over the same period. While technology names, in general, have taken a hit due to the Federal Reserve’s continued interest rate hikes and concerns about the broader economy, Apple has seen a sharper sell-off amid reports that demand for the latest iPhone 14 handsets, which were launched in September, remains weaker than expected. Per Bloomberg, Apple has asked its suppliers to hold off on plans to raise production of the iPhone 14 series by as many as 6 million units over the year’s second half. According to the report, Apple now aims to produce about 90 million handsets for the period, roughly flat versus last year. This has spooked investors, given that iPhone remains Apple’s flagship product accounting for about 53% of sales over the first nine months of this year.
However, now that Apple stock has seen a decline of about 12% over the last month, will it continue its downward trajectory in the near term, or is a rally imminent? Going by historical performance, there is a roughly equal chance of a rise or a decline in Apple stock over the next month. Out of 133 instances in the last ten years that Apple stock saw a twenty-one-day decline of 12% or more, 68 of them resulted in Apple stock rising over the subsequent month (21 trading days). This historical pattern reflects 68 out of 133, or about 51% chance of a rise in Apple stock over the coming month, implying a neutral near-term outlook for the stock. See our analysis on Apple Stock Chance of A Rise for more details.
Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years data
- After moving -8% or more over five days, the stock rose in the next five days on 56% of the occasions.
- After moving -8% or more over ten days, the stock rose in the next ten days on 59% of the occasions
- After moving -12% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 51% of the occasions.
This pattern suggests that it is moderately likely that Apple stock will see gains in the near term.
|S&P 500 Return||0%||-25%||60%|
|Trefis Multi-Strategy Portfolio||-2%||-26%||195%|
 Month-to-date and year-to-date as of 10/1/2022
 Cumulative total returns since the end of 2016