Why is Apple Stock Price Dropping? Is it right time to invest? All you need to know about it.

Why is Apple Stock Price Dropping?

Apple (AAPL) is a top tech company, famous for its products and services like iPhone, iPad, Mac, etc. Its stock trades on NASDAQ and is part of major indices. It had a market cap of $2.829 trillion on January 4, 2024, the highest in the world. Its stock had ups and downs in 2023 due to challenges like supply issues, regulation, and competition. Revenue was $89.5 billion, down 0.72%, and its net income was $22.96 billion, up 10.79%. Its EPS was $1.46, up 13.18%. Its stock hit a record of $199.62 on December 14, 2023, but then fell by 6.9% to $185.64 on January 2, 2024. Two analysts downgraded Apple’s stock in early 2024, worried about weak iPhone sales and more competition. Apple’s stock future depends on many factors, such as new products and services, legal and regulatory issues, COVID-19, and the economy. Analysts predict Apple’s stock will rise by 7.6% in 12 months.

Why is Apple Stock Price Dropping?

Apple has seen its stock price tumble in recent weeks, raising concerns among investors and sparking curiosity about the underlying reasons. While there’s no single silver bullet, here’s a closer look at several key factors contributing to the slump:

Analyst Downgrade: Barclays analysts downgraded Apple from “neutral” to “underweight” due to expected underperformance.

  • Tepid iPhone Demand: iPhone sales, the backbone of Apple’s revenue, are showing signs of fatigue. Analysts cite market saturation, rising competition from Chinese players like Huawei, and high price points for newer models as potential culprits.
  • Softness in Other Segments: Besides iPhones, other hardware categories like Macs and iPads haven’t exhibited the desired growth, further dampening investor sentiment.
  • Services Growth Plateauing: While Apple’s services sector has been a bright spot, analysts anticipate a slowdown in its growth rate, raising concerns about future revenue streams.

Macroeconomic Headwinds: Economic factors also affect Apple. Higher rates and inflation scare investors away from tech stocks. A possible recession worsens the mood, making some sell Apple despite its stability.

Market Correction After a Stellar 2023: Apple’s stock soared 50% in 2023. After such a big rise, the price often drops a bit. This normal trend also explains the fall.

Geopolitical Risks: US-China trade war and China’s iPhone ban for officials make Apple’s future uncertain. Apple is under regulatory scrutiny and legal challenges from the European Union and other authorities over its App Store practices and antitrust issues

iPhone 15 Lackluster Reception: Although official sales figures aren’t out yet, early reports suggest the iPhone 15 hasn’t been as warmly received as hoped. This further fuels bearish sentiment, as investors worry about future iPhone iterations failing to reignite demand.

Looking Ahead: Don’t panic, think long-term. Apple is still strong and innovative. The price drop may attract some buyers, others may watch.

What large investors are doing with Apple stock?

While it’s impossible to know exactly what every large investor is doing with their Apple stock at any given moment, we can analyze recent trends and public statements to get a general sense of their sentiment:

Holders with Consistent Positions:

  • Vanguard and BlackRock: These two financial giants are Apple’s top two shareholders, collectively controlling over 15% of outstanding shares. Both have publicly stated their long-term commitment to Apple, suggesting they are unlikely to sell their holdings significantly in the near future.
  • Berkshire Hathaway: Led by Warren Buffett, Berkshire Hathaway has been a vocal supporter of Apple for years. Buffett recently called Apple “the single best business in the world” and reaffirmed his confidence in the company’s long-term prospects.

Mixed Signals:

  • State Street Corporation: Although they hold a significant number of Apple shares, State Street hasn’t made any recent public statements regarding the stock. Their actions may be guided by internal analysis and client-specific strategies.
  • Mutual Funds and ETFs: These investment vehicles typically hold diversified portfolios, including Apple. Their actions might be indicative of broader market sentiment towards tech stocks rather than a specific stance on Apple.

Potential Sellers:

  • Hedge Funds: These short-term focused investors might be more susceptible to market fluctuations and analyst downgrades. Some may choose to sell their Apple holdings if they lose confidence in the company’s short-term performance.
  • Active Portfolio Managers: Some fund managers who actively manage their portfolios might take a tactical approach. They might sell some Apple shares to rebalance their holdings or hedge against broader market risks.

Additional Factors to Consider:

  • Recent Insider Sales: While insider sales don’t always signal negative sentiment, they can raise some eyebrows. Notably, some Apple executives sold a small portion of their holdings recently, although the reasons might not be related to concerns about the company’s performance.

These are general views from public data. To study individual investors, you need more data and analysis. Do your own research before investing like large investors. They may have different plans and results than you. Past results don’t guarantee future ones.

What should common investors do with Apple stocks?

With P/E ratio of 30 and Proce/Book ratio of 42, this stock is definitely over values from the perspective of defensive investors.

Barclays analyst Tim Long and Piper Sandler analyst Harsh Kumar downgraded Apple’s stock in early 2024, due to weak iPhone sales, supply chain issues, and macroeconomic headwinds. Long lowered his rating to underweight and price target to $160, while Kumar lowered his rating to neutral and price target to $205, expecting Apple’s stock to underperform in the near term.

Apple is definitely stong cmpnay and inevstors should keep it’s stock in their portfolio, however, this price is definitely looks high for inevstment. Common investors should wait and buy the stock is much lower than current price.

Synopsis

Apple (AAPL) is the world’s top company, famous for its products and services like iPhone, iPad, Mac, etc. Its stock had ups and downs in 2023 due to challenges like supply issues, regulation, and competition. Its stock hit a record of $199.62 on December 14, 2023, but then fell by 6.9% to $185.64 on January 2, 2024. Two analysts downgraded Apple’s stock in early 2024, worried about weak iPhone sales and more competition. Apple’s stock future depends on many factors, such as new products and services, legal and regulatory issues, COVID-19, and the economy. Analysts predict Apple’s stock will rise by 7.6% in 12 months.

Read Nike story at https://financeguide4u.com/nike-stock-price/

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