Three days after 2022 started, Apple stocks hit around $182.90 during intraday trading, making the Cupertino firm the first company in the world to be worth $3 trillion. But after reaching this height, the iPhone maker’s shares have slumped 25% in these past few months.
Although the company is still breaking revenue records in these past fiscal quarters, it has lost more than $800 billion in capitalization as tech stocks plunged, Bloomberg reports. The publication says the growing concern that the Federal Reserve’s interest-rate increases could tip the US into recession.
In addition, analysts have cut their estimates for Apple’s fiscal third-quarter earnings by 7.8%. Bloomberg says revenue projections are down about 4.2% over the same period and “the stock also has the lowest share of analyst buy ratings in more than a year.”
“In the same way that Apple benefited from the Fed-fueled bull market, it will suffer as the low interest rate and quantitative easing subsidies fade,” said David Trainer, chief executive officer at investment research firm New Constructs.
While Apple has still some interesting announcements to make over the next few years with its Mixed Reality headset, AR headset, and even car project, the company is also readying a new iPhone series, Apple Watches, Macs, and iPads for the second half of the year.
KeyBanc Capital Markets sees signs of softer US demand, citing credit card data spending. Others have raised concerns about the pace of revenue growth at the company’s App Store, with Morgan Stanley adding that this poses risks to its estimates for Apple’s Services business. According to data compiled by Bloomberg, Apple derived 18.7% of its fiscal 2021 revenue and more than 30% of gross profit from services.
Will this be enough to make the company go back to a $3 trillion market cap? We’ll have to follow and see.
