We recently compiled a list of the Obama Stock Portfolio: 10 Year Returns. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other stocks in former U.S. president Barack Obama’s portfolio.
Former United States President Barack Obama took office during one of the worst recessions in U.S. history, yet the stock market reached new highs during his tenure. Stepping into office in 2009, the year after stocks plummeted nearly 40% amid the financial crisis of 2007-2008, Obama made a remarkably well-timed market prediction. On March 3, 2009, just days before the S&P 500 hit an intraday low of 666 and a closing low of 676.53, the then-president stated, “What you’re now seeing is profit-and-earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it.” By the time he left office on January 20, 2017, the S&P 500 had soared to 2,263.69, reflecting a gain of about 225% since his predictive remark.
The “Obama Years” coincided with rapid technological advancements that significantly impacted the stock market. Apple Inc.’s iPhone, introduced less than two years before he took office, exemplified this era of innovation. In addition, during Obama’s presidency, billionaire Reed Hastings transformed Netflix Inc. from a DVD rental-by-mail company into a video-streaming giant, revolutionizing entertainment consumption. On the other hand, renewable energy, particularly solar energy, struggled during the president’s tenure. Despite the administration’s solar subsidies, investors were largely disappointed as those subsidies eventually faded. First Solar Inc., one of the largest U.S. solar equipment producers, saw its stock plummet by as much as 74% due to falling solar panel prices, making it the worst-performing S&P 500 stock of the Obama era.
How Did the Obamas Make Their Money?
From speaking at events worldwide to writing memoirs and signing a major production deal with Netflix, the Obamas have led a busy and highly lucrative life post-White House. Michelle Obama’s first memoir, “Becoming,” published in November 2018, became that year’s No. 1 best-selling book. Her second book, “The Light We Carry: Overcoming in Uncertain Times,” also achieved bestseller status. Similarly, Barack Obama’s latest memoir, “A Promised Land,” sold nearly 890,000 copies within 24 hours of its November 2020 release. These ventures, along with the six-figure pension that all former presidents receive, have significantly boosted the Obamas’ net worth, which is at least $70 million according to the International Business Times. The New York Post, however, estimates their fortune to be much higher, at $135 million.
Of course, Barack Obama’s income isn’t limited to speaking fees and pensions. Like many other wealthy individuals, he has invested significantly in the stock market. So what does his portfolio look like? When he took office in 2009, Obama, like all presidents, was required to make financial disclosures by law. At that time, Obama held $200,000-$450,000 in the Vanguard 500 Index Fund Investor Shares that tracks the S&P 500 index, according to a report by CBS News.
Our Methodology
These investments were selected from the top holdings of the Vanguard 500 Index Fund Investor Shares, one of Barack Obama’s primary investments during his presidency, according to official disclosures. We have provided each stock’s trailing 10-year returns to assess their performance over the decade. Data from approximately 919 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2024 was also analyzed to determine the number of hedge funds holding stakes in each firm.
Why are we interested in the stocks that hedge funds pile into? The reason is simple, our research has shown that we can outperform the market by imitating the top stock picks of best hedge funds. Our quarterly newsletter’s strategy picks 14 small and large-caps every quarter and it has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Note: The stocks are sorted in ascending order of their trailing 10-year returns.
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 150
Trailing 10-Year Returns: 24.83%
Apple Inc. (NASDAQ:AAPL) stands as a prominent tech giant. Headquartered in Cupertino, California, the company is renowned for its flagship products, including the iPhone, iPad, and Mac. Notably, Bloomberg recently reported on May 9 that the tech giant plans to incorporate its own high-end chips in data centers to deliver AI features this year.
TF International Securities analyst Ming-Chi Kuo said in a fresh note that Apple has a competitive edge over others with its on-device AI.
“Consumers may find purchasing Microsoft’s AI PC confusing (calculating whether it reaches 40 TOPS before purchase), whereas Apple directly tells consumers which models can support Apple Intelligence. Regardless of whether on-device AI applications meet consumer needs, Apple has a clear selling advantage from the start,” Kuo said.
On June 14, Erste Group upgraded its rating on Apple Inc. (NASDAQ:AAPL) from Hold to Buy, citing several positive factors contributing to the tech giant’s favorable outlook. The firm highlighted Apple Inc. (NASDAQ:AAPL)’s strong customer loyalty and continuous product innovation as key strengths. They emphasized the company’s advancements in its Mac lineup, particularly the introduction of the M4 chip, as a significant driver of long-term growth.
As of the first quarter of 2024, Insider Monkey’s database revealed that 150 hedge funds held stakes in Apple Inc. (NASDAQ:AAPL), collectively valued at $205 billion. This represented a notable increase from the previous quarter, where 131 hedge funds held stakes valued at $161 billion.
RiverPark Large Growth Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its first quarter 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL): Apple shares were a top detractor in the quarter. The company’s stock was pressured by negative news items including a government antitrust case, an Apple Watch patent dispute, and slowing China iPhone sales. Ultimately the company’s fiscal 1Q24 earnings report delivered a slightly better than expected quarter, but with guidance that disappointed investors. 1Q24 revenue and gross margin were better than feared, buoyed by stronger than expected worldwide iPhone sales which grew 6% despite a slight decline in China iPhone sales. Services revenue in the quarter was as expected and signaled the third quarter in a row of accelerating growth. Gross margins were also stronger than expected at 45.9%, the highest level in more than a decade. Guidance of $90 billion of revenue for 2Q24 was light however, due to weaker than expected iPhone sales in the current period and year-over-year declines in other hardware products facing difficult year-over year comps.
Although near-term trends are a bit muted, Apple is carrying lean inventory into an iPhone refresh cycle later this year. With an installed base of 2.2 billion active devices and significant growth of the company’s recurring revenue Services segment, we believe that Apple remains one of the most innovative, best positioned and most profitable companies in the mobile technology industry.”
Overall AAPL ranks 6th on our list of former U.S. president Barack Obama’s portfolio stocks. You can visit Obama Stock Portfolio: 10 Year Returns to see the other stocks that are on hedge funds’ radar. While we acknowledge the potential of AAPL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising than AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Disclosure: None. This article is originally published at Insider Monkey.