Apple (AAPL 2.19%) stock returned 30% in 2024, peaking around $259 per share in late December. Factors contributing to that upside included strong sales growth in the services business and excitement about new artificial intelligence (AI) features. But those bright spots have since been overshadowed by economic uncertainty and trade tensions.
President Trump on April 2 outlined an aggressive slate of reciprocal tariffs that would take the average tax on U.S. imports to its highest level in a century. While those duties have been paused for 90 days, tariffs totaling 145% on Chinese imports have not. And those duties may be especially problematic because Apple makes most of its iPhones in China.
Consequently, Apple stock had tumbled 33% to $172 per share by early April. Interestingly, the stock previously fell more than 30% from its record high four times in the last decade, but it always rebounded sharply in the next year. Here’s what investors should know.
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Apple stock has returned an average of 80% during the year following a 30% decline
Apple stock has declined more than 30% from a record high on four occasions since 2015, excluding the current situation. Past performance is never a guarantee of future results, but there is a clear pattern to those drawdowns: The stock has always recouped its losses and produced enormous returns during the next 12 months, as detailed below.
- April 2015: Apple stock peaked at $33 per share in April 2015 before falling 32% to $22.50 per share in May 2016. That drawdown was due largely to disappointing financial results driven by weak iPhone sales, but investor confidence was restored as the company leaned into its burgeoning services business. Apple reached a new high in February 2017, and the stock returned 73% during the year after the first close 30% below its high.
- October 2018: Apple stock peaked at $58 per share in October 2018 before declining 38% to $36 per share in January 2019. The drawdown was primarily caused by a trade war with China. President Trump during his first term imposed tariffs that raised the average tax on Chinese imports from 3% in 2018 to 21% in 2020. But Apple hit a new high in October 2019, and the stock returned 74% in the year after the first close 30% below its high.
- February 2020: Apple stock peaked around $82 per share in February 2020 before declining 31% to $56 per share in March 2020. The drawdown took place as investors panicked about the potential impact of Covid-19, which disrupted supply chains by forcing business closures around the world. But Apple reached a new high in June 2020, and the stock returned 119% during the year after the first close 30% below its high.
- January 2022: Apple stock peaked at $182 per share in January 2022 before falling 31% to $125 per share in January 2023. The drawdown took place during an S&P 500 bear market, which itself was brought on by recession fears stoked by runaway inflation and rapidly rising interest rates. But Apple reached a new high in June 2023, and the stock advanced 54% during the year following its first close 30% below its high.
To summarize, Apple stock has fallen more than 30% from its high four times since 2015, and it returned an average of 80% following its first close below that level. We can use that figure to make an educated guess about the future: Apple closed at $172 per share on April 8, the first close 30% below the record high it hit in December. The share price will increase 80% to $310 by April 2026 if performance matches the historical average, implying 51% upside from its current share price of $205.
Importantly, how Apple stock actually performs depends on financial results, and tariffs pushed by the Trump administration have sewn a great deal of uncertainty on that front.
Tariffs outlined by President Trump could be a serious headwind for Apple
President Trump has imposed tariffs totaling 145% on goods imported from China. That is nearly seven times higher than the average tariff on Chinese imports during his first term. How those duties will impact Apple, which makes 80% of its iPhones in China, is difficult to discern partially because trade policy seems to change almost daily.
For instance, U.S. Customs and Border Protection published a note this past weekend that seemingly excluded China-made smartphones, computers, and other electronics from the tariffs. But the narrative had shifted by Sunday, with President Trump saying no exceptions will be made. Instead, the administration says electronics will be subject to separate tariffs that take effect in a month or two.
Beyond China, Apple also manufactures a significant portion of its products in India, Japan, South Korea, Taiwan, and Vietnam. President Trump on April 2 outlined reciprocal tariff rates from 24% to 46% on goods imported from those countries. But the administration has since delayed those duties for 90 days, so the outcome remains highly uncertain. It also means Apple is essentially sitting on its hands right now because the company has little insight into the future.
Beyond U.S. trade policy, Apple has another problem in its misfire with Apple Intelligence, a slate of artificial intelligence features introduced last year for newer iPhone models. Many analysts expected a historic iPhone upgrade cycle to follow the launch, but that has yet to materialize. Instead, consumers seem relatively unimpressed with the AI features.
Additionally, what may have been the most anticipated and useful upgrade associated with Apple Intelligence — a more sophisticated version of the conversational assistant Siri — has been delayed due to internal issues. Some features are expected to launch in 2026, while others may not arrive until 2027, according to Bloomberg.
Looking ahead, Wall Street expects Apple’s earnings to grow at 11% annually through fiscal 2026, which ends in September. That makes the current valuation of 30 times earnings look somewhat expensive, especially given the uncertain nature of future U.S. trade policy. But patient investors eager to own shares can consider buying a small position today. Analysts may be overly pessimistic, in which case Apple could stage another strong rebound.
