Apple Stock Has Made Investors Rich for 20 Years — What Happens Next?
Written by
G. Brian Davis
Edited by
Zuri Anderson
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Over the last 20 years, Apple’s stock has grown by 15,308% according to FinanceCharts. It delivered an annualized return of 28.63%, as measured by compound annual growth rate (CAGR).
Apple has paid impressive returns by any standard. But can that last?
Mature Company, Not a Startup
Apple loves to market itself as a scrappy underdog serving up disruptive products for creative types who go against the grain. In reality, Apple is the third largest corporation in the world, with a market capitalization around $3.7 trillion, per The Motley Fool.
Self-made millionaire stock trader Vince Stanzione warns investors not to expect explosive growth from this behemoth.
“It’s now a slow-growth company that will likely leave shareholders disappointed in the coming years. So far in 2025, the stock has returned nothing and only pays a small dividend,” Stanzione remarked.
Oversized Exposure
As the third largest corporation in the world, Apple makes up a huge portion of many index funds and exchange-traded funds (ETFs).
If you own shares in a fund mirroring the S&P 500, Apple currently makes up 6.14% of the fund per SlickCharts, despite being one in just 500 companies. Now imagine you also own shares in a fund mirroring the Nasdaq 100 — Apple makes up 11.39% of that.
“Apple is so large that even in broad market ETFs like VTI, it constitutes over 5% of the fund’s portfolio,” explains financial planner Jay Zigmont of Childfree Trust. “Broad base investors who also hold Apple directly can easily have Apple make up over 10% of their entire portfolio.”
That worked out well for investors over the last 20 years, but won’t necessarily do you any favors in the next 20.
Proceed with Caution
Given that you already have heavy exposure to Apple through your broader funds, beware of holding too much individual Apple stock.
“There is considerable risk of any one stock making up more than 10% of your portfolio,” adds Zigmont. “If you look at Warren Buffett and Berkshire Hathaway, they have been selling off Apple stock for the past couple of years, cutting their holdings by more than half.”
Stanzione agrees: “As I write, Apple is on a forward Price/Earnings (P/E) ratio of 29, and I would not pay more than 20 for it. This means either the earnings have to increase a lot (doubtful) or the price has to drop before I’d buy.”
Even so, most analysts still feel confident in Apple. Of the 42 brokerage firms polled by Zacks, 23 rate Apple as a “Buy,” and another 16 rate it “Hold.” Only three brokerages advise selling.
Will Apple deliver annualized returns of nearly 29% like it has over the last two decades. Probably not. But it’s a solid, mature company that could provide modest growth in the years to come.
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