Apple's stock market value falls below $2 trillion


People look at Apple products as Apple Inc's new iPhone 14 models go on sale in Beijing, China, September 16, 2022. REUTERS/Thomas Peter

(Reuters) -Apple Inc's stock market value shrank sharply on Tuesday following its steep drop last year, leaving it below $2 trillion for the first time since March 2021.

The sell-off came a year after the iPhone maker became the first company to reach the $3 trillion market capitalization milestone.

Apple's shares declined 3.7% to $125.07 after Exane BNP Paribas analyst Jerome Ramel downgraded the company to "neutral" from "outperform," slashing his price target to $140 from $180, according to Refinitiv Eikon.

Also exacerbating investors' worries that a slowing global economy and high inflation may be hurting demand for Apple devices, Nikkei reported, citing unnamed suppliers, that Apple has told suppliers to manufacture fewer parts for its ear buds, watches and laptops.

The drop in Apple's share price put its market capitalization at $1.99 trillion.

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's value is just ahead of Microsoft Corp, valued at about $1.8 trillion.

With investors worried about consumer demand, analysts on average expect the Cupertino, California company to report a 1% 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 Inc, Alphabet Inc and Meta Platforms now accounts for about 18% of the S&P 500, down from as much as 24% in 2020.

Even after its 27% drop last year, Apple has provided stellar returns to long-term shareholders. Investors who bought and held Apple shares when cofounder Steve Jobs launched the iPhone in 2007 have enjoyed a gain of over 4,000%, not including dividends, compared to a 180% gain in the S&P 500 over the same period.

(Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur and Richard Chang)

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

   

Next In Tech News

New York recovers $50 million for defrauded Gemini Earn crypto investors
Tempus AI shares jump 8% in strong Nasdaq debut as US IPO market thaws
Meta pauses AI models launch in Europe due to Irish request
Adobe surges as AI optimism fuels annual revenue forecast
Microsoft to invest $7.16 billion in new data centres in northeastern Spain
Bitcoin miners pivot to South-East Asia after�China crackdown
China elder care sector plugs smart gadgets to fill workforce gaps
French tech firms warn immigration curbs could threaten AI ambitions
Chinese football fans are pouring money into a food stall run by Singapore’s goalkeeper. Here’s why
How Amazon blew Alexa’s shot to dominate AI, according to more than a dozen employees who worked on it

Others Also Read