As I write this, Microsoft (NASDAQ: MSFT) is up about 5% and now has a market value of $2.7 trillion on news that it is opening up its AI model for commercial applications. There is nothing this market loves more than innovation right now — not oil, not gold, not dividends.
In fact, the tech-heavy Nasdaq 100 had the best six months to start a year on record.
Amazon (NASDAQ: AMZN) has been on fire; it's up 66% this year. Apple (NASDAQ: AAPL) is up 49% since January 2, 2023, and is running higher. The great bear market that many predicted has simply not come to pass.
Will the tech rally continue? If past is prelude, it will. Let's look at Apple and its history of innovation coupled with its share price returns.
As we all know, Apple is launching its Vision Pro AR/VR headset sometime next year. Over the years, Apple's bold new products have changed the world, pushed its share price higher, and were the catalyst for those companies that make component parts.
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The iPhone Launch in 2007
On January 9, 2007, Apple's late co-founder Steve Jobs introduced the iPhone, a revolutionary product that combined a mobile phone, a widescreen iPod with touch controls, and a breakthrough internet communication device into one small, handheld piece of tech. The iPhone was not merely a new product but an entirely new category of device.
Apple's stock felt the effect almost immediately. After Jobs' announcement at Macworld, Apple's stock price increased from about $85 at the start of January 2007 to around $140 by the end of the year, representing over a 64% increase.
One notable beneficiary of the iPhone introduction was Broadcom Inc. (NASDAQ: AVGO), a major supplier of wireless and broadband communication components. As the iPhone’s demand skyrocketed, so did the need for Broadcom’s components. In 2007, Broadcom’s share price rose from about $30 in January to around $45 by December, a significant increase of 50% over the year.
The iPad Introduction in 2010
On January 27, 2010, Apple announced another groundbreaking product — the iPad. The tablet-style device presented a new way to experience the web, email, photos, and video, boasting a larger screen than a smartphone but maintaining portability that laptops couldn't offer. The iPad essentially defined the tablet category, again highlighting Apple's knack for creating new markets.
The iPad's introduction fueled investor confidence and market interest. At the start of 2010, Apple shares were priced at around $30 (adjusted for splits). By the end of the year, the stock had climbed to roughly $46, reflecting an increase of over 53%. The introduction of the iPad, coupled with the continuing success of the iPhone, illustrated Apple's continued growth potential, which excited investors.
Cirrus Logic (NASDAQ: CRUS), a supplier of audio chips, experienced a surge following the iPad's debut. As iPads started flying off the shelves, Cirrus, which had its chips installed in every iPad, witnessed an increase in its stock price. From January 2010 to December 2010, Cirrus Logic's share price almost doubled, climbing from around $6 to approximately $11.
The Debut of Apple Watch in 2015
Apple launched its smartwatch, the Apple Watch, on April 24, 2015. The Apple Watch was the company's first major product release after Steve Jobs' death and the first new product category under the leadership of Tim Cook. It signaled Apple's entry into the wearable tech and health and fitness markets.
In 2015, Apple's stock price appreciated from around $109 in January to a peak of nearly $132 in May, shortly after the Apple Watch's release. Although some of this rise could be attributed to other factors like the ongoing success of the iPhone 6, the Apple Watch announcement certainly contributed to the positive investor sentiment, representing another potentially lucrative product line for the company.
In the case of the Apple Watch, NXP Semiconductors (NASDAQ: NXPI), which provided the NFC chips used for the Apple Pay feature on the Apple Watch, saw a positive impact on its stock price. In 2015, NXP's share price increased from approximately $70 in January to around $100 by December, reflecting a robust growth of about 43%.
I am currently doing my due diligence and writing a special report on the component makers for the Vision Pro. The trick to maximize gains is to get in well before the mass market hype that will surround the Vision Pro release next year. Keep an eye out for the release of this special investment research report over the next few weeks.
All the best,
Christian DeHaemer Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
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