We provide an analysis of both the long-term and short-term performance of the stock vs. its index.
Over the past 20 years, Apple Inc. (AAPL) has significantly outperformed the NASDAQ Stock Market index. While the NASDAQ, which includes a broad range of technology and growth stocks, has experienced substantial growth driven by the tech sector, Apple’s stock price growth has been notably more pronounced. Apple’s transformation from a niche computer maker to a dominant player in consumer electronics, software, and services has fueled its stock appreciation. Key product launches like the iPhone, iPad, and various iterations of the Mac, along with expanding services like the App Store and Apple Music, have driven revenue and profit growth, boosting investor confidence. Additionally, Apple’s consistent innovation, strong brand loyalty, and robust financial performance have contributed to its stock price rising at a much faster rate than the NASDAQ average. While the NASDAQ index has benefited from the overall tech boom, Apple’s stock has often been a leading contributor to the index’s gains. Despite market volatility and economic downturns, Apple has shown resilience and strong recovery, maintaining a trajectory that outpaces the broader NASDAQ market. This outperformance reflects Apple’s unique position as a market leader with a diversified product ecosystem and a strong balance sheet, making it one of the most valuable and influential companies in the world.
Apple Inc.’s stock price showed a steady upward trend from early 2025, rising from around $230 in September 2025 to a peak above $340 in late July 2026, before stabilizing near $320 in September and October 2026. This growth outpaced the NASDAQ Composite Index, which increased from about 22,000 points in late 2025 to over 26,500 by October 2026. Apple’s strong financial performance, driven by robust demand for its products and services, including new device launches and expanding services ecosystem, supported this price appreciation. Economic conditions, such as moderate inflation and steady consumer spending, favored tech sector growth. Geopolitical stability during this period minimized supply chain disruptions, benefiting Apple’s global operations. Industry factors like innovation in technology and consumer electronics trends sustained investor interest. Despite some market volatility, investor sentiment remained positive towards Apple due to its market leadership and consistent revenue growth. The NASDAQ’s broader gains reflected general tech sector strength but were less pronounced than Apple’s stock appreciation, highlighting Apple’s relative outperformance. Overall, Apple’s stock price movements reflect strong company fundamentals and favorable external conditions compared to the broader NASDAQ market.
This analysis focuses on the stock’s relative performance vs. the market i.e. whether the stock is likely to perform better than other stocks in the same market.
In the graph above, the performance of the stock vs. the market is indicated by the blue line. When the blue line slopes up, it means the stock has outperformed the market. The earnings growth of the stock vs. the market is indicated by the red line. When the red line slopes up, it means that the stock’s earnings growth is faster than that of the market. The red line also tracks the premium or discount that the stock’s PE has been trading in vs. the market’s PE.
In order for the stock to outperform the market, either the red line has to slope upwards (i.e. superior earnings growth) or the PE discount narrows/PE premium widens (i.e. blue line moves from below the red line to above it).
The red line tracks the relative performance of the stock had it traded at 1.11 times market PE. It is currently trading at 1.50 times market PE. Earnings growth of the sector in the future is about the same as that of the market.
From September 2005 to September 2026, Apple’s stock performance against the NASDAQ has been driven more by changes in its relative price-to-earnings (PE) ratio than by changes in relative earnings. Initially, the relative PE was around 2.03, and it fluctuated significantly over the years, reaching peaks above 2.5 in late 2005 and early 2006, then declining below 1.0 during 2016-2017, and rising again above 1.4 in recent years. Meanwhile, relative earnings steadily increased from about 68 in 2005 to over 1500 by 2026, showing consistent growth but at a steadier pace. The substantial variation in relative PE, especially the periods of expansion and contraction, had a more pronounced impact on Apple’s stock performance compared to the more gradual increase in relative earnings. Thus, the stock’s outperformance relative to the NASDAQ is largely attributable to changes in investor sentiment and valuation multiples rather than earnings growth alone.