Share price decline continues in 2023 as Apple’s market value slips below $2 trillion, after it was the first to reach $3 trillion milestone
Apple’s share price in 2022 and now 2023 reflects the turmoil the iPhone maker continues to face in the new year.
Apple’s stock market value shrank 3.74 percent on Tuesday following its steep drop in 2022 – leaving the tech giant with a market valuation below $2 trillion for the first time since March 2021.
The decline is noteworthy for one of leading tech firms in the world, considering it was this time last year (January 2022) when Apple became the first company ever to reach the $3 trillion market capitalisation milestone, after its shares hit a record high of $182.88.
But on Tuesday its shares closed down 3.74 percent at $125.07, valuing the firm at $1.99 trillion, 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.
The Nikkei report also pointed out that Apple has told suppliers to manufacture fewer parts for its ear buds, watches and laptops.
According to Reuters, Jerome 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.
Reuters noted that with investors worried about consumer demand, analysts on average expect Apple to report a 1 percent 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 was quoted as saying.
Apple’s share price experienced a 27 percent drop in 2022, yet despite this Apple has posted stellar returns to long-term shareholders.
Apple had become the first publicly listed US company worth $1 trillion back in August 2018.
Then in August 2020, as the Coronavirus pandemic was engulfing the world, Apple breached the $2 trillion valuation.
Then in January 2022 it surpassed (briefly) the $3 trillion mark.
But Apple is not alone as being a tech company in the exclusive trillion dollar valuation club.
Microsoft is the only firm close to Apple, as Redmond is currently valued at $1.78 trillion (down from $2.51 trillion in 2022).
The combined stock market value of Apple, Microsoft, Amazon, Alphabet, and Meta now accounts for about 18 percent of the S&P 500, down from as much as 24 percent in 2020.