How Apple stock tends to trade following earnings

Yahoo

01-05-2025

Apple (AAPL) shares inch lower in Thursday's after-hours trading, coming off of the iPhone maker's earnings call for its fiscal second quarter. The tech giant boasted a quarterly beat on the top and bottom lines.
Yahoo Finance markets and data editor Jared Blikre lays out how Apple's stock has historically traded following previous earnings releases.
Also catch up on Yahoo Finance senior reporters Alexandra Canal's coverage of Apple's digital services segment.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
Apple shares lower after second quarter results, but historically how does the iPhone maker tend to trade post earnings? We are finances, Jared Blickery is standing by with more, Jared.
That's right, Josh. We've got price history in Apple all the way back to the early 1980s. Very different company back then. This chart focuses on the last two and a half years. Why? Because that is the two and a half year bull market that we are in right now. So 10 quarters. And this basically posits, what happens if you bought Apple stock right before earnings and then held for one day or one week, one month, one quarter, or one year? And you can see one day, it only the median result is only 0.1%. So you got a lot of up days, you got a lot of down days, and they kind of average out to about nothing. Same thing for the one week time period. And you're also going to notice that I have the percent positive. So for one day, it's split right down the middle over the last two and a half years. We got an even balance of winners and losers. When you go up to one week, you have more winners, you have it more winners than losers, 60% of the time. One month, 70% of the time. And that's kind of the magic number I look for because stocks tend to go up. I want to see something that has positive price action for at least 70% of the time. And then if you look at the returns down here, they start to get interesting around one quarter up 4.2%, but you notice the percent positive is only 60%. What really stands out in this chart to me is that the one-year holding time produces an average return of 22.7% with a 100% positivity rate. And if you're thinking about the last two and a half years, well, for three of those quarters, we haven't had one full year. So we're actually only using seven of those, but still some impressive stats right there. So that's the last two and a half years. Now, I want to show you going back to basically the beginning of this century. So 25 years. What if you had bought after every earnings announcement and held for one year? Well, that's what this line represents. And in fact, we've averaged this over 10 quarters or two and a half years as well, to kind of smooth it a little bit. What you're going to notice is that in the wake of the .com crash, we actually went negative for a little bit there. But then we surge positive and you would have had 100% returns for for a little while there, had you bought each of those times, each of those earnings announcements. And you can see it kind of drifted lower over the years, and then it started accelerating again. This was the Fang period, even though Apple wasn't an original Fang member, and it kind of peaked in 2020, 2021, then it came down again, but you can see it still remained positive. And in fact, the only time in the last decade, I think, that we've had a one-year holding period off of earnings that has been negative was 2022. So the longer holding times are definitely working in investors' favor. Um, I do want to present this because this speaks as to the immediate situation here of what the options market is expecting for the next 24 hours, basically into the close tomorrow. The options market is pricing in a 4.1% move. And that doesn't tell you if it's going to go up or down. And what has actually happened in the last 90 minutes or so, we've seen about a 3 and a half percent move to the downside. So that's right in line with that. It's also in line with history because over the last two and a half years, these earnings reactions have been about 3.8%. So investors were expecting just a little bit more volatility this time. Finally, I want to tell you what's happened every other day other than earnings days. So those days, the regular days have averaged a move of 2.1%, which is roughly half of that. So on these earnings days, just shows you that we see usually twice the volatility. So tomorrow into the close, we might expect a little bit more movement here, but for all intents and purposes, we've probably seen a lot of the volatility shake up. Back to you, Julie.
Jared, thank you so much for all of that. Appreciate it.