Apple significantly underperformed the Nasdaq in August, with hopes pinned on the iPhone 15 in September.

August was a poor month for the US stock market. According to Dow Jones Market Data, as of last Friday's close, the Nasdaq fell by 5.3% in August, potentially marking the worst monthly performance of the year.

Apple dropped by 9.1%, experiencing its first monthly decline since 2023. Furthermore, its decline was greater than that of the Nasdaq, as investors are pinning their hopes on the release of the iPhone 15 next month.

As of last Friday, Apple's performance lagged behind the Nasdaq by 3.8 percentage points, potentially marking its largest monthly underperformance since November 2022.

Why is Apple weaker than the overall market?

In the quarter ending July 1st, Apple's revenue declined by 1% compared to the same period last year, which weighed down the company's stock price.

Importantly, Apple's iPhone sales declined year-on-year, and the iPhone is the company's highest revenue-generating product.

"Management has stated that the US smartphone market has experienced a decline over the past few quarters," said Chief Financial Officer Luca Maestri. "Due to headwinds from foreign exchange and an imbalanced macroeconomic environment, product revenue was $60.6 billion, down 4% from last year."

According to a report by the International Data Corporation, global smartphone shipments declined by 6.8% year-on-year in the second quarter of this year, marking the eighth consecutive quarter of contraction. The market is struggling with weak demand, inflation, macroeconomic uncertainty, and excess inventory.

Hope lies in the iPhone 15

Investors will be pinning their hopes on Apple's latest iPhone 15, set to be released in September.

"Historically, Apple's stock price has consistently risen in the initial months following the release of a new iPhone. This trend may repeat itself after the release of the iPhone 15," said an analyst from Evercore ISI.

"The iPhone 15 will bring design and functionality updates, changes in design... which will not only drive device upgrades but also push for higher pricing and gradually convince consumers to spend more money on purchasing the Pro models rather than the entry-level ones, thereby driving higher average selling prices (ASP)."

Apple is rated as outperforming the market with a target price of $210, according to Evercore ISI.

Wedbush analysts are also optimistic, rating Apple as outperforming the market with a target price of $230.

"We expect the price of the iPhone 15 Pro/Pro Max versions to increase by $100 to $150. After promotions by major carriers, many upgrade users should be able to accept this. We estimate that this means there are approximately 240 million iPhones that have not been upgraded in over four years."