If You'd Put $1,000 Into Apple Stock 20 Years Ago, Here's What You'd Have Today

Apple stock has lost $255 billion in value since its all-time high, but its long-term performance tells another story entirely.

Apple stock AAPL stock
(Image credit: Getty Images)

Apple (AAPL) stock went into a funk after hitting an all-time closing high at the end of July, but it's hard to feel too bad for long-term shareholders. AAPL was still up more than 40% for the year-to-date through the first week of November.

Besides, it's still by far one of the best stocks of all time.

A disappointing fiscal third-quarter earnings report sparked the mid-summer selloff, as market participants fretted over the iPhone maker's third consecutive year-over-year drop in quarterly revenue. Apple beat Wall Street's earnings and revenue forecasts for its fiscal fourth quarter too, but overall sales declined for a fourth quarter in a row. 

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Worries about when Apple will return to growth has caused Apple stock, a component of the Dow Jones Industrial Average, lost almost 10% from July 31 through November 7, wiping out about $255 billion in market capitalization in the process. To put that number in context, that's more than the entire market values of fellow Dow stocks Merck (MRK) or Salesforce (CRM). 

AAPL stock's recent stumble has its market cap back below $3 trillion, and that's certainly no fun for anyone who came to the Apple party late. But, as noted above, it's tough to have much pity for truly long-time shareholders. After all, they've enjoyed pretty much incomparable returns over the past few decades. 

From January 1990 through December 2020, AAPL stock created $2.67 trillion in shareholder wealth, or an annualized dollar weighted return of 23.5%, according to an analysis by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University. 

Indeed, per Bessembinder's findings, which account for a stock's increase in market value adjusted for cash flows in and out of the business and other adjustments, Apple was the best stock in the world over those 30 years

True, AAPL stock traded sideways for the first few years of the 21st century, but an explosion of innovation soon put an end to that. Under the visionary leadership of the late Steve Jobs, Apple essentially reinvented itself for the mobile age, launching revolutionary gadgets such as the iPod, MacBook and iPad.

But what really set Apple on its course to becoming the world's largest publicly traded company – and one of hedge funds' favorite blue chip stocks — was the 2007 debut of the iPhone.

Today, Apple isn't just a purveyor of gadgets; it sells an entire ecosystem of personal consumer electronics and related services. And it's a sticky ecosystem at that.

No less an eminence than Warren Buffett has called the iPhone maker Berkshire Hathaway's (BRK.B) "third business," noting Apple fans' fantastic brand loyalty as one reason for being all-in on the stock. (Apple accounts for almost 39% of the value of the Berkshire Hathaway equity portfolio.)

No wonder the iconic tech firm was tapped to become one of the elite 30 Dow Jones stocks. In 2015, Apple replaced AT&T (T) in the Dow Jones Industrial Average. 

The bottom line on Apple stock?

apple stock

(Image credit: YCharts)

Over the past 20 years Apple stock generated an annualized total return (price change plus dividends) of 37%. By comparison, the S&P 500 delivered an annualized total return of 10% over the same span. 

What does that look like on a brokerage statement? Check out the above chart and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth more than $536,000. The same $1,000 invested in the S&P 500 would have theoretically turned into $6,172 over the same period.

For those wondering if Apple stock is a buy at current levels, Wall Street mostly thinks so. Of the 46 analysts covering AAPL surveyed by S&P Global Market Intelligence, 21 rate it at Strong Buy, nine say it's a Buy, 13 call it a Hold, two have it at Sell and one calls it a Strong Sell. That works out to a consensus recommendation of Buy, with mixed conviction. 

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Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.