How Another Biden Presidency Might Affect Your Apple Investment
Over the long run, earnings drive stock prices, but in the short term, any number of factors can play a role — including who is sitting in the White House. Department of Justice investigations, trade policies and even casual comments directed at certain companies by a president can move markets and impact your investments. As Apple is the biggest company in the S&P 500, it plays a big role in the performance of the overall market. This makes it important to know what a president’s policies toward Apple are.
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When it comes to how another Joe Biden presidency might affect your Apple investment, you can pick up a lot of clues from his first term. Since Biden has already tipped his hand over the past three-plus years, there’s a lot of information available about how he might approach Apple over a potential second term. Here’s what you need to know.
How Has Apple Performed Under Biden?
Biden officially took office on Wednesday, Jan. 20, 2021. As of the close of business on that day, Apple shares stood at $129.57. As of April 23, 2024, Apple shares closed at $166.90. That marks a return of 28.8% over about 3 1/4 years. Of course, this comes as Apple has had a rough start to 2024. The stock has been selling off since its 2024 peak of $195.18 on Jan. 23, almost two years to the day from Biden’s inauguration. At that point, the stock had returned over 50% during the Biden administration.
In other words, Apple has performed quite well under the Biden administration, with the exception of its performance in 2024. Its recent underperformance can be attributed to a number of factors, many of which have nothing to do with President Biden. For the first time since 2019, for example, Apple has reported falling sales on a year-over-year basis for all four quarters of the last fiscal year. It also hasn’t unveiled any new, ground-breaking products or even significantly upgraded its flagship iPhone. A slowing economy in China has also played a role.
Has Biden Taken Any Actions Against Apple?
The Biden administration can’t be completely exonerated when it comes to struggles Apple may be having. On March 21 alone, for example, Apple shed $100 billion in market cap thanks to an antitrust lawsuit filed by Biden’s Department of Justice. The essence of the suit is that Apple uses anti-competitive tactics to unfairly drive revenue. Specific grievances outlined in the suit include the following:
Blocking innovative super apps
Suppressing cloud gaming platforms
Excluding cross-platform messaging apps
Limiting the functionality of non-Apple smartwatches, helping to lock Apple Watch buyers into the iPhone and vice versa
Limiting the third-party payment capabilities, privileging Apple Pay competitors like PayPal
If the government wins its case, punishments could include anything from a large fine to forcing Apple to alter how it does business. This latter case would be the most damaging to the company going forward. However, many pundits feel there isn’t really much of a case against Apple, including the chairman of Forbes Media, Steve Forbes.
What Should You Do With Apple If Biden Is Elected To a Second Term?
If you’re investing in any stock, including Apple, you should have a long-term view. Most advisors suggest that means at least five years — or longer than a single presidential term. In that sense, it may be more fruitful to think of Apple in terms of its products, earnings and strategic plan rather than who is in the White House in 2025. However, it is true that presidents can enact policies that can affect earnings, whether through trade wars, antitrust lawsuits or other actions.
The Department of Justice’s antitrust lawsuit could certainly be a headwind for Apple going forward, and a negative outcome could certainly hurt the company. But the results of this suit may not be known for years, and the stock’s performance YTD in 2024 reflects some of this potential bad news.
Things could actually be even worse if Biden loses the presidency. If Biden falls in the November election, it means former President Donald Trump will win a second term, and he is famously anti-China when it comes to trade policies. If tariffs and other trade actions were implemented again under Trump, Apple could suffer. Portfolio Wealth Advisors president Lee Munson told Yahoo Finance Live, “Biden has not been friendly to China, but Trump’s going to be even worse.”
Interest rates and taxes are other factors to consider regarding Biden and Apple. Biden will likely keep taxes higher than Trump, according to analysts at TD Securities, and this could hurt corporate profits in general, including Apple’s. But the Federal Reserve is likely to cut interest rates in late 2024 and into 2025, and inflation has been falling. These could both be tailwinds for stocks like Apple.
The bottom line is that there are a number of factors that could influence the trajectory of Apple’s stock, and Biden’s influence might be minimal. It’s best to have a long-term view and look at the whole picture, including revenue, earnings, interest rates and product development, to determine what to do with your Apple stock.
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