Apple shareholders have profited from a trailing-10-year total return of 1,190%.
Valuation expansion played a role, but earnings-per-share growth was the bigger catalyst.
In January, then-CEO Tim Cook said that there were more than 2.5 billion active Apple (NASDAQ: AAPL) devices around the world. During the most recent fiscal quarter (the third quarter, ended June 27), the business exceeded 1.5 billion paid subscriptions to its family of services. These two data points demonstrate how dominant the consumer tech juggernaut has become.
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Over the past decade, Apple shares have produced a total return of 1,190% (as of Oct. 5). This gain would've turned a starting $10,000 investment into more than $129,000 today.
In October 2016, Apple was the world's most valuable enterprise. While its market capitalization has ballooned to $4.9 trillion, it has given up the top spot to Nvidia.
Apple's stellar share performance can partly be credited to valuation expansion. The stock's price-to-earnings ratio grew by 179% during that time. Market sentiment toward the business improved, which is unsurprising, as Apple has remained incredibly successful.
Profit growth was the main driver of shareholder returns. From the third quarter of fiscal 2016 to the most recent fiscal quarter, diluted earnings per share soared 469%.
Looking ahead, it's unlikely that the bottom line will advance at a similar rate. Apple is simply too large to keep growing at a brisk pace in the long run.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Nvidia. The Motley Fool has a disclosure policy.