Following a significant decline last year, Apple Inc.’s stock market value dropped precipitously on Tuesday January 3, putting it on course to fall below $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 $3 trillion market capitalisation milestone.
According to Refinitiv Eikon, Exane BNP Paribas analyst Jerome Ramel downgraded Apple to “neutral” from “outperform” and lowered his price target to $140 from $180. As a result, shares of Apple dropped 4% to $124.60.
Due to supply chain concerns from Foxconn, the manufacturer, and consumers cutting down on high-end phones, Ramel reduced his iPhone shipment targets for fiscal 2023 from 245 million to 224 million units.
Apple Inc. is currently valued at $1.98 trillion, just overtaking Microsoft Corp., which is worth $1.78 trillion, at the current stock price.
Apple is expected to report a 1% decline in the December-quarter revenue in the coming weeks, on average, according to analysts, confirming investors’ concerns that a weakening global economy and soaring inflation may be harming demand for Apple gadgets.
That would mark Apple’s first quarterly revenue decline since the March quarter of 2019.
According to Bokeh Capital Partners’s Kim Forrest , “They (Apple) tend to skew to the high-end consumer device customer but even that demographic mig ht be being affected by the high price of everything”.
Apple, Microsoft, Amazon Inc., Alphabet Inc., and Meta Platforms’ combined stock market value now makes up around 18% of the S&P 500, down from as high as 24% in 2020.
Even after losing 27% of its value last year, Apple has still given long-term stockholders stellar returns. Investors who purchased and held Apple’s stock at the time co-founder Steve Jobs unveiled the iPhone in 2007 have profited by more than 4,000 percent, excluding dividends, as opposed to the S&P 500’s 180 percent gain during the same time period.
Author-Roberta Appiah
