Apple's Ternus Inherits High Price, Momentum as New CEO

Apple's new CEO, John Ternus, will take over on September 1, marking the first change in leadership at the company in 15 years. Tim Cook is stepping down to become executive chairman of the board.

The transition has sparked interest among investors, who are wondering what impact it will have on Apple's stock performance. According to historical data, planned CEO handoffs with internal promotions at large megacap tech companies have led to varying results in the first year after the change.

Since 2011, four such transitions have occurred, and none of them seem to be driven by the succession itself, but rather by the starting point the new CEO inherited. The price-to-earnings ratio at the time of the transition has been a significant factor in determining the stock's performance in the first year.

Apple's current price-to-earnings ratio is around 36 times earnings, which is higher than what Tim Cook inherited but lower than Amazon's multiple during its handoff. The company enters the transition with momentum, driven by a new generation of iPhone and a services business that continues to compound.