Editor's note: This is part seven of a 13-part series about companies whose shares have amassed 100,000% returns for investors and the path taken to generate such impressive gains over the long term. See below for links to the other stocks in this series.
The roots of Apple's (AAPL) success are attributable to so many important factors that it would require book-length treatment to give them all justice.
But some important themes that contributed to its incredible growth include a combination of continuous innovation, strategic and at times ruthless management, strong brand loyalty, and a robust ecosystem of products and services.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Starting with the Apple II and Macintosh, Apple redefined personal computing and then came to dominate how it functioned. In 2001, when desk and laptop computing became saturated with competitors, Apple extended computing into devices with the iPod. The iPod and the notion of device-driven computing set the stage for the iPhone which was introduced in 2007.
Since then, Apple, and the world, have never been the same. By 2023, iPhone sales reached $200 billion, accounting for over 52% of Apple's total revenue of $383 billion, reflecting the company's ability to redefine markets and then dominate them.
In terms of importance, sales of the iPhone extend well beyond the mobile device market. Now, there are an estimated 1.4 billion iPhone users in the world.
While they have driven Apple's earnings, they have also done something else. They have knitted 1.4 billion users to the Apple ecosystem so tightly that the bond is almost unshakable. Apple has capitalized on the bond with an array of services that now represent the fastest-growing revenue segment of the company.
Revenues associated with the App Store, iTunes Store, AppleCare, iCloud, licensing, music, television and credit cards have grown at approximately 18% annually and now represent $85 billion in sales. Services sales are almost as large as Apple's Mac, iPad and wearables businesses combined.
But it's not just the top line that matters. Stock prices are driven by earnings. And services have dramatically higher margins. For 2023, the gross margin on services was 71%, almost double the gross margin for products, which was approximately 38%.
Another key factor for Apple's success is its ability to grow revenues with a brand that increases customer loyalty and supports premium pricing. Anyone who has bought an iPhone knows how expensive they are.
But it's not just premium pricing. Over time, Apple has been able to make more profit from each sale it makes. In 2014, Apple's gross margin was 38.6%. In 2023, it was 44.3%. Improvement in the gross margin has propelled Apple's net income, which has grown, on average, 10.5% annually since 2014 and stood at $97 billion in 2023.
While net income has grown at 10% annually, the earnings per share between 2014 and 2023 has grown at an average annual rate of 16%. Earnings per share have accelerated faster than net income because Apple aggressively buys back its stock, reducing its share count from 23.5 billion shares in 2014 to 15.5 billion shares in 2023.
In 2023 alone, Apple repurchased $76.6 billion of its own shares, with about $74 billion remaining under its current buyback program auguring for continued share repurchases.
Overall, Apple's phenomenal nearly 170,000% increase in share price since its initial public offering (IPO) is the result of its relentless innovation, strategic expansion into services, well-earned premium pricing, and consistent revenue growth.
As Apple continues to innovate and explore new technologies, its growth story remains compelling and the story about Apple's return to shareholders has not yet been fully told.
Note: This content first appeared in Louis Navellier's latest book, The Sacred Truths of Investing: Finding Growth Stocks that Will Make You Rich, which was published by John Wiley & Sons, Inc.
Other 100,000% return stocks
- McDonald's Stock: How Small Changes Have Led to 100,000% Returns
- How Amazon Stock Became a Member of the 100,000% Return Club
- M&A Is Why UnitedHealth Group Stock Is a Member of the 100,000% Return Club
- Sherwin-Williams Is a Sleeper of the 100,000% Return Club
- Dealmaking Drives HEICO Stock's 100,000% Return
- Adobe Stock's Path to a 100,000% Return Is Impressive
-
The Most Popular Apps for Retirement Planning in 2025A J.D. Power survey ranks retirement planning apps based on customer service and satisfaction. Does your financial app make the cut?
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms
Standard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
-
One Small Step for Your Money, One Giant Leap for RetirementSaving enough for retirement can sound as daunting as walking on the moon. But what would your future look like if you took one small step toward it this year?
-
This Is What You Really Need to Know About Medicare, From a Financial ExpertHealth care costs are a significant retirement expense, and Medicare offers essential but complex coverage that requires careful planning. Here's how to navigate Medicare's various parts, enrollment periods and income-based costs.
-
I'm a Financial Planner: Could Partial Retirement Be the Right Move for You?Many Americans close to retirement are questioning whether they should take the full leap into retirement or continue to work part-time.
-
From Mortgages to Taxes to Estates: How to Prepare for Falling Interest RatesAs speculation grows that the Federal Reserve will soon start lowering interest rates, now is a good time to review your financial plans for housing, estate, taxes, investing and retirement to make the most of potential changes.
-
This Is How Lottery Winners Build Lasting Legacies, From a Financial ProfessionalWinning a massive lottery jackpot, like the recent $1.4 billion Powerball, requires seeking immediate legal and financial counsel, protecting your identity and winnings and planning your legacy.
