Apple’s stock market value fell sharply on Tuesday (Jan 3) following its steep drop last year, putting it on track to end below US$2 trillion for the first time since March 2021.
The sell-off comes a year after the iPhone maker became the first company to reach the US$3 trillion market capitalisation milestone.
Apple’s shares fell 4 per cent to US$124.60 after Exane BNP Paribas analyst Jerome Ramel downgraded the company to “neutral” from “outperform,” slashing his price target to US$140 from US$180, according to Refinitiv Eikon.
Ramel cut his iPhone shipment targets for fiscal 2023 to 224 million units from 245 million units, reflecting supply chain issues from manufacturer Foxconn and consumers cutting back spending on high-end phones.
At Apple’s current stock price, the company is worth US$1.98 trillion, just ahead of Microsoft, currently valued at US$1.78 trillion.
Underscoring investors’ worries that a slowing global economy and high inflation may be hurting demand for Apple devices, analysts on average expect the Cupertino, California company to report a 1 per cent drop in December-quarter revenue in the coming weeks, according to Refinitiv. That would mark Apple’s first quarterly revenue decline since the March quarter of 2019.
“They (Apple) tend to skew to the high-end consumer device customer but even that demographic might be being affected by the high price of everything,” Bokeh Capital Partners’ Kim Forrest said.
Last year’s steep sell-off on Wall Street punished tech-related heavyweights as investors worried about rising interest rates dumped stocks with high valuations.
The combined stock market value of Apple, Microsoft, Amazon.com, Alphabet and Meta Platforms now accounts for about 18 per cent of the S&P 500, down from as much as 24 per cent in 2020.
Even after its 27 per cent drop last year, Apple has provided stellar returns to long-term shareholders. Investors who bought and held Apple shares when co-founder Steve Jobs launched the iPhone in 2007 have enjoyed a gain of over 4,000 per cent, not including dividends, compared to a 180 per cent gain in the S&P 500 over the same period.
Source By https://www.channelnewsasia.com/business/apples-stock-market-value-falls-below-2-trillion-3181066