Apple’s shares fell over 3% during intraday trading on Tuesday, taking its market cap down to $1.98 trillion
Although the iPhone maker remains the world’s most valuable company by market cap, the company’s worth has fallen below $2T for the first time since 2021.
Apple’s stock price started its fall in early 2023 on the reports that the company cut its MacBook, Apple Watch and AirPod orders in Asia. Apple has already struggled with iPhone 14 Pro shipments during the holiday season due to the stringent Covid restrictions on its primary factory in China. Therefore, in the December quarter iPhone deliveries fell by 22%.
Reportedly, the company has also ordered fewer components for its flagship products including AirPods, Apple Watch and MacBook laptops from suppliers.
One thing is clear – Apple’s growth has slowed down. Firstly, it’s hard to compete with the pandemic boom of consumer electronics. Besides, rising interest rates add pressure to discretionary spending. High-ticket items such as Apple devices are harder to buy amid the economic downturn.
Additionally, a strong US dollar compared to foreign currencies makes Apple’s sales abroad less valuable in USD terms. Finally, Apple’s main production facilities are situated in China, where the pandemic still hinders steady operations.
Apple is one of the few companies that ever surpassed the $1T market cap threshold. It first hit a $2 trillion valuation in August 2020 amidst the pandemic-heightened demand for remote work/study devices. Although, in 2022, Apple’s share price declined 27%, illustrating the worst performance since 2008, its market cap kept above $2T.
Nevertheless, investors still find optimistic signs that Apple’s shares may rebound this year. To begin with, Apple stock has extremely rarely shown poor performance in two consecutive years. Besides, the company is actively working on its supply issues. Thus, certain assembly plants in China have started to operate at a higher capacity, while Apple has also diversified its supply base, shifting the focus from China.