- Apple slid into a bear market in Wall Street trade on Wednesday, down 20% from its October peak.
- In August, the tech giant became the first US company with a $1 trillion valuation.
- Shares have been hit hard after the company reported underwhelming iPhone sales and suppliers warned of a slowdown in the smartphone market.
Apple has fallen into a bear market, down 20% from its October peak. The stock topped out at $US233.47 on October 3 and was near $US187 overnight.
The tech giant in August became the first US company with a $US1 trillion valuation as shares raced to a record high. It saw its market value top out at $US1.12 trillion in early October, before a stock-market sell-off ravaged the tech sector.
In November, Apple reported underwhelming iPhone sales and said its holiday quarter would be on the low end of expectations. It also said it would stop reporting unit sales for iPhones, iPads, and Macs.
But that was just the start of the recent worries for Apple shareholders. Earlier this week, a handful of Apple suppliers cut their outlooks, suggesting weaker smartphone demand ahead.
On Monday, Lumentum, the main supplier of the Face ID technology in Apple’s latest generation of iPhones, cut its outlook after one of its biggest customers — it did not say which — reduced a shipment request.
Then, on Tuesday, Qorvo, an iPhone radio-frequency chip supplier, lowered its guidance over what it said was a drop in demand for flagship smartphones. A handful of other iPhone suppliers, such as the screen maker Japan Display and the British chipmaker IQE, also slashed their forecasts this week. None of the companies specifically named Apple as the culprit.
Analysts up and down Wall Street have been downgrading the stock and cutting their price targets in response to the recent developments.
“We see growing risk of even softer iPhone unit demand, with downside in China, India and other emerging markets, where Apple may need to start considering lower price points,” the Guggenheim analyst Mark Cihra said in a note sent out to clients on Wednesday. He downgraded Apple to “neutral” and removed his prior $245 price target.
That followed similar comments out Tuesday from Goldman Sachs, which said “end demand for new iPhone models is deteriorating.”
Apple was up 13.6% this year through Tuesday.