Apple Becomes Best-Performing Dow Stock of 2019

By Douglas A. McIntyre Updated Jan 30, 3:48PM EST · Published Sep 14, 9:10AM EDT

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Apple Becomes Best-Performing Dow Stock of 2019 — © Sascha Steinbach / Getty Images

Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction), which struggled with investors earlier this year, posted an impressive share price increase after it launched the new iPhone 11 and Apple TV+. The rally last week pushed its stock to $218.75, which is up 38.7% this year. That is better than any other of the 30 Dow Jones industrial average components. The Dow is up 16.7% for the same period to 27,219.52.

The new product launches were indeed the tonic the stock needed. It had sold down sharply in mid-summer after Apple announced earnings. The mainstay of revenue, the iPhone, continued to weaken as the iPhone X series did poorly, particularly in the world’s largest wireless market, China. The trade war better China and the United States also dragged on the stock, as anxiety about Apple supply chain interruptions grew. Apple sources many parts of the iPhone from companies in China.

Apple’s management argued that its Services business would replace the iPhone as the company’s growth engine. It is not an easy argument to make. Services revenue in Apple’s most recently reported quarter was $11.5 billion, out of a companywide total of $53.8 billion. iPhone sales totaled $26 billion.

The launch of Apple TV+ is critical to the new strategy. Apple already has a huge music store. Its app store is by far the largest in the industry. By some estimates, total apps downloaded since the store started are more than 130 billion. Many experts believe that app sales cannot continue to grow at rates they have over the past decade.

All this means that Apple’s bet on TV is absolutely critical. At $4.99 for the first month after a seven-day free trial, it is aggressively priced compared to industry leaders Amazon and Netflix, which have price points of $12.99 a month. Apple’s management has gambled that, although its library of content is limited compared to the leaders, the low price, the Apple brand and the hundreds of millions of iPhones, iPads and Macs in the world are large enough base to which it can market its streaming service.

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A significant number of investors have bought into Apple’s new iPhone and services plan. Its market cap is back near the $1 trillion level. When it announces earnings in the upcoming weeks, that likely will be the catalyst to keep Apple’s share growth rate well ahead of the Dow’s — or to drag it back down.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.