Apple's Stock Has A Teflon Shield

The iPhone maker’s shares, down for the year, are still doing far better than those of its tech peers

- By Jeran Wittenstein, with Subrat Patnaik and Tom Contiliano

It's been one blow after another for Apple Inc. in recent months. Labor unrest and production halts at Foxconn Technology Group's massive iPhone plant in central China are expected to cause Apple to miss out on the sale of millions of the devices this holiday season, the company's most important time of the year.

Most economists predict that a global recession will take hold next year, reducing consumer appetite for the expensive devices Apple sells. As central banks rapidly raise interest rates to bring inflation to heel, technology stocks have fallen out of favor especially. Apple stock this year has lost more than $800 billion, or about a fourth of its market value.

At the same time, Apple is under increasing antitrust scrutiny for its App Store practices. In the European Union, the company is preparing to allow apps from other sources on its iPhones and iPads to comply with strict EU requirements coming in 2024, Bloomberg News has reported. That could inspire the US and other countries to follow the EU's lead, threatening to take a bite out of the $23 billion in revenue that analysts estimate the App Store will generate in the company's current fiscal year, which ends in September.

That's a lot of bad news. And yet in the stock market, as of Dec. 20, Apple is vastly outperforming other tech giants, whose shares have cratered this year. While Apple has declined 25%, Meta Platforms Inc. has lost 65% of its value, and Amazon.com Inc. is down 49%.

The explanation for Apple's performance begins with its immense profits. It's the world's most valuable company, sporting a $2.1 trillion market value, so it's hardly a surprise that Apple churns out more profit than any other business in the S&P 500. Where it really distinguishes itself in the minds of investors is what it does with those earnings.