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Why Apple Stock Lost 10% Last Month

By Jeremy Bowman – Updated Oct 2, 2020 at 10:55AM

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Shares of the iPhone maker pulled back after its stock split at the end of August.

What happened

2020 has been a banner year for Apple (AAPL -0.80%), but that momentum wasn't enough to help the stock in September as shares of the iPhone maker skidded following its stock split at the end of August. The pullback came as the Nasdaq entered a correction in the beginning of September, indicating investors believed tech stocks had become overvalued. A launch event for a new Apple Watch and iPad later in the month wasn't enough to move the stock higher, and shares finished September down 10%, according to S&P Global Market Intelligence.

The chart below shows the stock's trajectory for the month.

AAPL Chart

AAPL data by YCharts.

So what

Apple came into September at all-time highs, riding a surge at the end of August after announcing a 4-for-1 stock split. However, the split-driven pop quickly evaporated as savvy investors seemed to realize that it didn't actually add any value, even though the stock gained 21% in August in anticipation of the split.

The iPhone XS

Image source: Apple.

The euphoria over stock splits by both Apple and Tesla seemed to trigger the sell-off in the Nasdaq in the beginning of September after the tech-heavy index had nearly doubled after bottoming in March. In the following days, Apple shares continued to slide as its feud with Fortnite maker Epic Games reached a fever pitch after Apple booted it from the App Store for refusing to collect its 30% commission on in-app payments. The move underscores what many see as Apple's control over apps as it essentially has a duopoly with Alphabet's Android.

The iPhone maker's big event on Sept. 15, revealing new products and an Apple One bundled subscription, was also greeted with shrugs from the market as the stock fell in each of the three sessions following the event. Over the last week of the month, the stock recouped some of its losses as the market rebounded on hope that Congress would pass another stimulus package.

Now what

Apple shares could be volatile again this month as the company is expected to unveil its new iPhone 12, its first 5G phone, which some analysts expect to spark a "supercycle" of upgrades. The company's fourth-quarter earnings report is also due out at the end of the month. Analysts see revenue falling 0.3% to $63.8 billion, and earnings per share slipping from $0.76 to $0.70. 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and Tesla. The Motley Fool has a disclosure policy.

Stocks Mentioned

Apple Stock Quote
$146.63 (-0.80%) $-1.18
Alphabet Stock Quote
$99.48 (-0.96%) $0.96
Tesla Stock Quote
$182.45 (-6.37%) $-12.41
Alphabet Stock Quote
$99.87 (-0.95%) $0.96

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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