Text: Derek Saul
Apple's woes on Wall Street continued, with the iPhone maker's shares falling to their lowest level in more than four months on Tuesday amid growing investor anxiety about Apple's efforts in artificial intelligence and its declining Chinese business.
Key facts
Shortly after the market opened, Apple's stock price fell more than 2% and fell as low as $169, the lowest since October 31 last year and the sixth consecutive trading day**.
In the first six weeks of 2024, iPhone sales fell 24% year-on-year, a report from Counterpoint Research in Hong Kong, a report showing that iPhone sales fell 24% year-on-year in the first six weeks of 2024, which is not ideal considering that China accounts for more than 15% of Apple's revenue, and Apple's sales in China have fallen 13% year-on-year in the most recent quarter.
iPhone sales in China have reportedly declined, following the pressure on Apple from sluggish iPhone growth earlier this year. At the same time, there are growing concerns among analysts that Apple is lagging behind other big tech companies in the field of artificial intelligence.
Apple** has returned -11% year-to-date and 14% over the past 12 months, well below the S&P 500 (8% year-to-date and 29% over the past year).
Barton Crockett, an analyst at Rosenblatt, said in a note to clients on Tuesday that Apple's stock price was "at a crossroads" and that he believed Apple may have lost its "luster" on Wall Street because its electric car program has fallen abruptly and the release of the Vision Pro mixed reality headset is "nothing new."
Big numbers
$368 billion. That's how much Apple lost its market value in 2024, bringing its valuation to 2$6 trillion and led Apple to cede the world's most valuable company to Microsoft. Microsoft and Nvidia, the world's third-largest company, have increased their market capitalization by about $240 billion and $920 billion, respectively, so far this year.
Important remarks
Crockett believes that Apple will "most likely" need to demonstrate "new capabilities that make sense in generative AI" to "regain some shine." His $189 price target for Apple still implies 11% headroom, but is below the average $200 price target for analysts tracked by FactSet.
Chief Review
Wedbush analysts, led by Dan Ives, wrote in a letter to clients on Tuesday: "For Apple, weak iPhone sales in China are 'a cherry on Apple's bad news sundae,' and it may look like a show."'Horror show', but'Apple will have bright days'。Wedbush has set a price target of $250 for it, which means that Apple will have 47% of the room for **, with a valuation close to $4 trillion. Wedbush cited growth opportunities in Apple's main iPhone and services businesses and the potential for Apple to tap into its large customer base as the main reasons for its bullishness.
Unexpected facts
This will be the first time since 1997 that Apple has delivered negative returns for investors, while the S&P 500 has posted positive returns, according to FactSet. At the end of 1997, Apple's market capitalization was less than $2 billion, up from Tuesday 2The market capitalization of $7 trillion is just a drop in the bucket.
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