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Apple’s stock market value falls below $2 trillion

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By Nivedita Balu and Noel Randewich

(RockedBuzz via Reuters) – Apple Inc’s stock market fell sharply on Tuesday after last year’s sharp drop, leaving it below $2 trillion for the first time since March 2021.

The sell-off came a year after the iPhone maker became the first company to hit the $3 trillion market cap mark.

Shares of Apple fell 3.7% to $125.07 after Exane BNP Paribas analyst Jerome Ramel downgraded the company to “neutral” from “outperform,” cutting its price target to $140 from $180, according to Refinitiv Eikon.

Also exacerbating investor concerns that a global economic slowdown and high inflation could hurt demand for Apple devices, Nikkei reported, citing unnamed suppliers, that Apple has told suppliers to make fewer parts for its earphones. , watches and laptops.

The decline in Apple’s stock price drove its market capitalization to $1.99 trillion.

Ramel reduced its fiscal 2023 iPhone shipment goals to 224 million units from 245 million units, reflecting manufacturer Foxconn’s supply chain issues and consumers reducing spending on high-end phones.

At Apple’s current stock price, the company’s value is just above that of Microsoft Corp, valued at about $1.8 trillion.

With investors worried about consumer demand, analysts expect the Cupertino, Calif.-based company on average to post a 1% drop in December quarter revenue in the coming weeks, according to Refinitiv. This would mark the first decline in Apple’s quarterly revenue since the March quarter of 2019.

“They (Apple) tend to lean towards the high-end consumer device customer, but even that demographic could be impacted by the high price of everything,” said Kim Forrest of Bokeh Capital Partners.

Last year’s sharp sell-off on Wall Street punished tech-heavyweights as investors worried about rising interest rates dumped stocks with high valuations.

The combined stock market value of Apple, Microsoft, Amazon.com Inc, Alphabet Inc and Meta Platforms now accounts for about 18% of the S&P 500, down from 24% in 2020.

Even after last year’s 27% decline, Apple has delivered stellar returns to shareholders over the long term. Investors who bought and held Apple shares when cofounder Steve Jobs launched the iPhone in 2007 enjoyed a more than 4,000% gain, excluding dividends, compared to a 180% gain in the S&P 500 over the same period.

(Reporting by Nivedita Balu in Bangalore; Editing by Arun Koyyur and Richard Chang)