Apple Stocks are down more than 8% this week, removing about $200 billion in value and dragging down the Dow and Nasdaq. Apple is now official in a bear market along with other tech megastocks.
Apple has shrunk in a bad week for the stock market, which is selling off stocks in almost every industry on worries about a Fed rate hike, weakening consumer confidence, rising inflation. growth and supply chain challenges around the world. The Nasdaq Composite is down more than 7% so far this week and is on speed for six consecutive weeks of decline.
Apple faces some supply chain challenges, but its business outlook is unchanged this week.
The company is generally considered a “safe” place for investors to deposit their money. The fact that it sold off along with everything else is a bad sign for other stocks and a sign that investor confidence is waning.
Renaissance Macro Research’s Jeff DeGraff told CNBC on Thursday that in a bear market, there’s nowhere to hide — and that includes Apple.
“For the tech sector, when they’re starting to take the lead in the tech sector, that’s a better sign that they’re starting to embrace things,” DeGraff said.
“Our assumption is that the AAPL sell-off will continue, not because we know anything about service revenue or iPhone shipments this quarter, but because we believe that once investors When investors start selling the best names, they are rarely done in a day.” Datatrek co-founder Nick Colas on Thursday.
It’s a notable reversal from last November, when high-growth tech stocks began to fall and Apple typically attract investors those looking for a lower risk bet on technology.
Apple still has incredible cash flow, helping it to withstand a downturn and return profits to shareholders. It generated $28 billion in operating cash flow in the third quarter on total revenue of $97.3 billion. It said it spent $27 billion in the quarter buying back its own shares and paying out dividends.
Weakening consumer confidence isn’t starting to hurt iPhone sales – in fact, in Q3 every single Apple business grew except for the iPad (Apple blamed the lack of chips).
When CEO Tim Cook was asked about the impact of macroeconomic conditions and inflation on his business during an earnings press conference last month, he said the company’s bigger problem is make enough iPhones and Macs to meet global demand – not a drop in demand.
“Right now, our main focus is on the supply side,” says Cook.
But even as Apple begins to feel the effects of worsening macroeconomic conditions, it remains a company with a globally renowned brand name, high profit margins, stores in malls. major shopping and a collection of related products and services that appeal to affluent consumers around the world.
If growth slows, Apple will continue to generate huge profits and sales — even if it no longer exists. most valuable company In the world.
