While it never seems to leave the spotlight for too long, Apple (AAPL Quick QuoteAAPL - Free Report) is currently hogging the attention of investors around the world as we prepare for the company’s annual Worldwide Developers Conference next week.

Speculation about what Apple might announce at the latest WWDC is abound, but it seems likely that we will see some form of Siri-based home assistant device, as well as the debut of iOS 11.

And as the anticipation of these announcements continues to ramp up, now seems like a good time to reflect on Apple’s insane stock performance so far this year. It wasn’t long ago that were talking about Apple “losing its magic” after the company posted its first annual sales decline since 2001, but the stock has significantly outpaced the S&P 500 recently, leaving many investors to wonder how exactly Apple got its groove back.

Of course, we all know that AAPL has been one of the most incredible stocks to own over the years. Thanks in no small part to the genius of co-founder and longtime CEO Steve Jobs, the company was able to consistently deliver value to shareholders—at the same time that it was revolutionizing consumer electronics.

But things start changing after the passing of Jobs, and the story took a major turn last year when sales of Apple’s marquee product, the iPhone, started slipping for the first time. For much of 2016, the stock barely kept pace with the S&P 500, a benchmark that Apple investors had grown accustom to crushing. Apple shares ended the year up about 12.15%, meagerly ahead of the S&P’s 11.96% gain.

Nevertheless, things have changed quickly yet again. So far this year, AAPL has soared more than 33%, while the S&P 500 has gained just less than 9%.

So what happened?

Well, Apple’s rebound really started earlier this year when the company reported the results of its holiday quarter. iPhone sales are always the key to Apple’s reports, as the product accounts for roughly 60% of its total revenue, and the December quarter—which saw Apple post 5% growth in this segment—broke a streak of three-straight periods of iPhone sales declines.

Another encouraging aspect of this report was the growth of Apple’s Services unit, which includes things like Apple Care, Apple Pay, Apple Music, and the App Store. The company marked Services growth of 18% in the first fiscal quarter, and it was able to maintain that growth rate in its latest quarterly report as well.

Interestingly, Apple’s second-quarter report marked a return to iPhone sales declines. Unit sales slipped 1% year-over-year to 50.8 million, which missed our consensus estimate of 51.2 million and continued the sharp decline from 2015’s peak of 61.2 million.

But none of this really gets to the root of why Apple has been on such a roll. No, in my view, Apple’s recent performance has nothing to do with its results; instead, it has everything to do with anticipation.

As mentioned, this year’s WWDC is garnering a lot of buzz, and it seems like it will be a monumental moment for the company to display some of the work it has been doing in the worlds of AI and IoT. Some analysts have also murmured about a possible MacBook upgrade.

What’s more, this year is the ten-year anniversary of the iPhone. Whether it be the iPhone 8, a combination of the 7s models + the iPhone 8 later in the year, or even a special iPhone X edition, we can rest assured that a monumental new phone is coming soon.

This effect is two-fold. First of all, it lightens the relevancy of the 1% drop in iPhone sales in the most recent quarter. We can easily blame that slump on people holding out for the next announcement. Also, we can see that investors think the iPhone 8 is going to be huge, as the stock has been moving with every rumor and leak that spills out.

So far, it seems like the next iPhone will have an all-glass body, an edge-to-edge display, no home button, wireless charging, and new OLED technologies.

Tack this anticipation onto the overall strength of the technology sector, as well as Wall Street’s hopes for corporate tax reform, and it’s easy to see why Apple shares are soaring. Let’s just hope Apple can live up to the expectations.

Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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