Apple to relinquish historic US$3 trillion value as sales fall
APPLE’S market value is set to dip below the historic US$3 trillion level after the iPhone maker’s outlook for the fourth quarter sparked worries over tepid demand for its handsets and other gadgets.
Shares in the California-based company dropped 2.4 per cent in US premarket trading on Friday (Aug 4), giving it a market value of roughly US$2.93 trillion if the move holds. Apple posted its third straight quarter of declining sales late on Thursday, and predicted a similar performance in the current period.
Rosenblatt Securities downgraded the stock to neutral, saying the mixed report “highlights the slowdown phase in which Apple now sits”.
Even though the company’s services business is accelerating, “a slowdown in the US seems likely to last until a material new product category takes hold”.
Analyst Barton Crockett sees this prospect as “uncertain both in timing and success, leaving little reason to favor shares now trading near peak absolute and relative multiples”.
Apple’s valuation has been a concern for investors. The stock trades at more than 29 times estimated earnings, a premium to both its own history and the overall market.
The reaction to Apple’s results wasn’t uniformly negative, and Citi is optimistic about where it goes from here. The firm placed Apple on a 90-day upside catalyst watch ahead of its expected iPhone 15 series release in September.
Apple in June became the first company with a US$3 trillion value. The shares have gained 47 per cent this year through Thursday amid a broad tech rally on investor hopes that the development of artificial intelligence could provide a fresh boost to growth. BLOOMBERG
Share with us your feedback on BT's products and services
