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Can You Learn Anything From the Highs and Lows of Apple Stock in 2018?

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2018 has been a tumultuous year for Apple (NASDAQ: AAPL ) and especially for Apple investors. Apple stock started the year at $172.26, soared past $232 (becoming the world's first trillion dollar company), then spent the past three months tanking.

Even after record gains yesterday, AAPL stock is still trading in the $156 range, down nearly 10% from January and off its October highs by a third. There were multiple factors that caused the roller coaster performance. To help make sense of it, and to give some hints about how 2019 might turn out, here are the key highs and lows of Apple stock's 2018.

Apple Stock 2018: The Good

A few things went pretty well for AAPL stock in 2018: iPhone revenue continued to be strong (including 29% growth in Q4), although that comes with a big asterisk that shows up on the "bad" list. The Apple Watch Series 4 was very well received, despite a price hike. The addition of high-end health features like an integrated ECG test are adding to its mainstream appeal. The Apple Watch saw big sales gains in 2018, including 54% year-over-year growth in Q3 2018 .

In 2018, the company also finally released a new version of the MacBook Air, its best-selling (but horribly outdated) laptop. Some of the details have irked longtime fans of the affordable Mac laptop, including a move to all USB-C ports, the switch to a new "butterfly" keyboard and a price hike. But overall, I count this (and the new Mac Mini) as a win.

Apple Music also continued to grow at an impressive clip. And while Spotify (NYSE: SPOT ) retained a comfortable overall lead, in 2018 Apple Music overtook its rival in the U.S. market .

Apple Stock 2018: The Bad

It will be apparent from the size of the respective lists that AAPL's 2018 was dominated by bad news. That's why AAPL stock is sitting where it is.

The first hint of negativity on the product front actually started in the 2017 holiday season. The HomePod smart speaker missed its launch date, meaning it was missing during holiday sales, allowing rivals Amazon (NADAQ: AMZN ) and Alphabet's (NASDAQ: GOOG , NASDAQ: GOOGL ) Google division to further their smart speaker leads. When the HomePod did finally arrive this spring, sales were "underwhelming" and have remained that way - the $349 price probably isn't helping there.

Then there was the iPhone, the single most important product for AAPL and the key driver of Apple stock. In Q4 2017, the world smartphone market began to decline for the first time ever. At the same time, Chinese manufacturers like Huawei were upping their game with flagship competition, stifling AAPL's efforts in big markets, including China and India. In 2018, Apple released its most expensive smartphone ever (the $1,099 iPhone XS Max), along with the $999 XS and the more affordable $749 iPhone XR. The three model strategy confused buyers, as did overlapping features and a staggered release. Combined with falling demand and increased competition at the high end, iPhone growth has been flat, although higher prices have helped deliver healthy revenue increases.

Reacting to a future where iPhone sales are likely going to continue sliding (panicking AAPL stock investors), in November AAPL announced it would no longer release iPhone unit sales.

Outside of product releases, some of the company's business moves didn't go as planned in 2018. The ongoing legal battle with Qualcomm (NASDAQ: QCOM ) continues to intensify and was a black mark on AAPL's year. That one has ramped up as the year winds down, with Qualcomm victories in Chinese and German courts leading to iPhone sales bans . And anything that threatens the iPhone - the revenue lifeblood of the company - is also bad news for Apple stock.

Speaking of which, the company's strategy of buying back shares has also backfired in 2018. The Wall Street Journal reported that as a result of the dive in Apple stock value, the company lost $9 billion this year by investing in itself.

As if all this wasn't bad enough, Apple found itself caught up in an escalating trade war with China. In November, President Trump suggested the possibility of a 10% tariff on iPhones and other AAPL products that are assembled in China. Nothing has come of that threat (yet), but the suggestion immediately hit AAPL stock.

Ending 2018 on a High Note

As of yesterday , AAPL stock was closing 2018 off on a high note. Apple stock posted a five-year record 7.04% gain on the day. And a report that manufacturing partner Foxconn would start assembling the flagship iPhone X series in India has potential to help with two critical issues: the threat of tariffs on iPhones made in China, and Apple's woeful performance in the Indian market.

With the year (almost) in the rear-view mirror, Apple and AAPL stock investors are looking forward to a fresh start in 2019, with hopes that new ventures like the company's upcoming streaming video service help to turn things around from 2018.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securitie s.

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The post Can You Learn Anything From the Highs and Lows of Apple Stock in 2018? appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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