Apple stock has fallen more than 8% this week, erasing nearly $ 200 billion in value and dragging down the Dow and Nasdaq indices. The iPhone maker is now officially on the market for a bear along with other technology giants.
Apple has had a bad week for the equity market, selling stocks in almost every industry for fear of rising Fed rates, weak consumer confidence, rising inflation and global supply chain challenges. The Nasdaq Composite has fallen more than 7% so far this week and is on track for a six-week losing streak.
Apple faces some supply chain challenges, but its business outlook hasn’t changed significantly this week.
The company is generally seen as a “safe” place for investors to keep their money. The fact that it is being sold along with everything else is a bad sign for other stocks and a sign of declining investor confidence.
Jeff DeGraff of Renaissance Macro Research told CNBC on Thursday that a bear has no place to hide in the market – and that includes Apple.
“For technology, when they start taking the lead in technology, it’s a good sign that they’re starting to take everything,” DeGraff said.
“Our assumption is that AAPL sales will continue, not because we don’t know anything about this quarter’s iPhone shipment or service revenue, but because we believe that once investors start selling the best brand names, it’s rarely done overnight,” Datatrack reported on Thursday. Co-founder Nick Colas says.
That trend marks a significant reversal since last November, when growth-heavy technology stocks began to dwindle and Apple often attracts investors who are looking for low-risk bets on technology.
Apple still has outstanding cash flow, which enables it to withstand the recession and return shareholders’ profits. The company generated $ 28 billion in operating cash flow in the March quarter, total sales of $ 97.3 billion. It said it had spent 27 27 billion in the quarter to repurchase its own shares and pay dividends.
And weak consumer confidence hasn’t begun to hurt iPhone sales – in fact, in the March quarter, the company’s business grew, with the exception of iPads, which blamed Apple’s chip shortage.
When CEO Tim Cook was asked about the macroeconomic situation and the impact of inflation on his business in an earnings call last month, he said the company’s biggest problem is building enough iPhones and Macs to meet global demand – not a demand recession.
“Right now, our main focus is, to put it bluntly, on supply,” Cook said.
But even if Apple begins to feel the effects of the deteriorating macroeconomic situation, it is still a rare company that appeals to rich people with world-renowned brands, premium profit margins, stores in key shopping centers and a collection of related products and services. Consumers around the world.
What’s more, if growth slows, Apple will continue to generate huge profits and sales – even if it is no longer the most valuable company in the world.