Apple Inc.: Can Apple Stock (AAPL) Repeat the Last 10 Years of Growth?

Apple StockIs Apple Stock Poised for Gains in 2017?

Almost exactly 10 years ago, Steve Jobs stood on a stage to declare that Apple Inc. (NASDAQ:AAPL) was about to change the world. He wasn’t kidding. On that night, Jobs unveiled the “iPhone” for the first time—a device which sent Apple stock (AAPL stock) soaring and transformed dozens of industries in the process.

Can history repeat itself? Can AAPL stock find another golden goose of a product?

This question haunts Apple stock on a daily basis. Investors are unsure about what to expect from AAPL stock now that smartphone sales are slipping across the board, particularly in China. After all, Chinese sales were supposed to provide the next big tailwind for Apple stock.

However, China hasn’t been the knight in shining armor that Apple stock bulls hoped for. The share price may have recovered from its 2016 blues, but I remain skeptical that Apple can achieve a repeat performance of the last 10 years. For one thing, the great Steve Jobs is gone.

CEO Tim Cook has been a great leader in his absence, and I have a lot of respect for the guy, but he lacks the creative vision needed to reboot AAPL stock growth.

But that’s not all…

Every so often, Apple stock investors get their hopes up about a new device which could be as disruptive as the iPhone was in its heyday. The “iPad.” The “Apple Watch.” “Apple TV.” None of these projects, with the possible exception of the Apple Watch, could be characterized as a failure.

They brought billions of dollars into the firm, but it scarcely mattered because Apple was a victim of its own success. Even billions of dollars in new revenue were a drop in the bucket for the world’s richest company, so the price of Apple stock began to stagnate. The company needed an “iPhone-level” success story to repeat the gains of the last decade, but none were on the horizon.

The grim reality of this situation had investors primed for a bearish turn on AAPL stock. In fact, you could say that China’s slowdown was the straw that broke the camel’s back. Weak numbers from the Asia Pacific region cost AAPL stock nearly one-fifth of its market value.

Things have improved slightly since then. Apple stock is actually up 21% over the last 12 months, meaning it has regained its footing. But I don’t think the stock can climb much higher.

Why, you ask? Because AAPL stock bulls are now turning to ever more ludicrous notions of what will drive those gains. Take the “brilliant” folks in Nomura Holdings, Inc.’s (TYO:8604) research division, Instinet, for example.

They believe that a bunch of design changes in the “iPhone 8” will prompt a “super cycle” for Apple stock, wherein iPhone users start upgrading en masse to attain the new features. (Source: “NOMURA: iPhone 8 is going to blow iPhone 6 out of the water,” Business Insider, January 6, 2017.)

Here’s what they expect from the iPhone 8:

  1. OLED screen
  2. Full glass display
  3. No “home button”
  4. Enhanced “taptic engine” (responsible for different types of vibrations)
  5. Improved camera
  6. Wireless charging

These are great features, but seriously? We’re expecting this to drive AAPL stock up to $250.00 or $300.00? The chances of that happening are slim to none. Even if there is a mass migration to the iPhone 8, no one can guarantee that customers will upgrade like clockwork every few years.

So, under the best-case scenario—during which iPhone 8 sales break the bank—we cannot reasonably expect that future expectations would rise in any meaningful way. We may have to accept that Apple stock is just a reliable blue-chip stock now; not the growth machine we once knew. The problem with Apple stock is lightning rarely strikes twice in the same place.

It’s time that investors understood that.