History says Apple's slumping stock will hold tech back from beating the market, according to Bank of America

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If history is any indication, the S&P 500 technology sector can't outperform without Apple.
That's according to a new Bank of America analysis of the performance of the S&P 500's tech sector relative to the broader market during periods when Apple has fallen more than 30%.
Still, the firm's strategists have a positive view on tech more broadly as they believe valuations have already discounted much of the downside risk.
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Can technology stocks outperform without the help of Apple? Bank of America Merrill Lynch isn't so sure.

"History says no," equity strategists led by Savita Subramanian wrote. "The S&P 500 Technology sector has never outperformed the S&P 500 when AAPL has plummeted more than 30%."

Their conclusion comes from an analysis going back to 2011, when Apple became the world's largest company by market capitalization for the first time. The strategists looked at the performance of the S&P 500's tech sector relative to the broader market during periods when Apple shares have fallen by more than 30%.

Bank of America's analysis underscores the outsized impact Apple has on its big-tech peers and the broader stock market. Still, the firm is optimistic on tech, and believes Apple's downturn is a combination of both Apple-specific issues and macroeconomic forces. After all, Apple began selling off months before its announcement.

Read more: Samsung, like Apple, feels sting of slowing global growth

Apple shares have come under pressure since the company's quarterly revenue announcement last week shook shareholders and slammed the broader market.

After Apple warned it would fall short of its prior estimates due to iPhone weakness primarily in Greater China, the stock plunged and posted its largest one-day loss since 2013. Now, Apple is trading 36% below its October all-time high of $233.47 a share.

In its report, Bank of America outlined Apple's three sell-offs of more than 30% since 2011 (including this most recent occurrence). In each instance, technology underperformed. Here's a breakdown:

September 2012 to April 2013: Apple plunged on what Bank of America called "lack of innovation concerns." Technology underperformed the S&P 500 by 18 percentage points.
February 2015 to May 2016: Apple fell 32% due to "slowing China growth concerns." Technology underperformed the S&P 500 by 8 percentage points.
October 2018 to current: Apple has fallen just over 36%, and technology has lagged the broader market by 5.5 percentage points.

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