When i saw last night's stock price wondered what had happened.
Here's what i found...
The company's stock price has been brought down by the market's decline, and its recent iPhone launch wasn't as successful as anticipated.
Investors have turned their backs on tech stocks in 2022 as increasing inflation has led to a decline in consumer spending. This has planted doubt for the financial futures of some of the world's most valuable companies.
Apple's (AAPL -3.73%) share price has fallen almost 23% since January, but many others have tumbled far more. For instance, PC-component leaders AMD and Nvidia have seen their stocks sink about 60% in the same period.
With steep declines in the market, tech companies faced intense scrutiny over the year. Apple is among those affected, as investors have taken out their uncertainty on the company's stock.
Declines in tech
Many tech companies suffered the misfortune of having their 2022 financials compared to those of last year, when demand in the industry hit an all-time high for multiple businesses. The COVID-19 lockdowns in 2020 and 2021 drove up sales for a variety of tech industries as consumers invested in home offices and entertainment devices by purchasing PCs, game consoles, TVs, and more. As a result, Apple's stock price reached a historic high in December 2021.
However, reopenings in 2022 have been met with increases in cost of living and interest rates, culminating in a perfect storm for the tech industry and severely reducing consumer demand. Moreover, comparisons with the overwhelming highs of the previous year have only exacerbated the declines.
Apple has fared better than most companies in 2022, but its share price still fell 14% between Sept. 12 and Oct. Amid concern that sales for its newest line of iPhones decreased from previous years. On Sept. 7, Apple unveiled its iPhone 14 lineup, which saw the MacBook manufacturer make a change to its smartphone strategy. The company widened the gap between its base and Pro models by adding several new features to the more costly iPhone 14s but keeping the lower-tier models largely the same as the previous year's.
The result has been record sales figures for the iPhone 14 Pro models but dismal demand for the base versions. The cost-effective models were the biggest-selling part of the iPhone lineup in previous years, leading analysts to wonder whether the Pro models can sell enough to make up for Apple selling fewer units overall. For instance, on Sept. 29, Bank of America's Wamsi Mohan downgraded his recommendation for Apple's stock from buy to neutral over weakening demand for the company's smartphones. The revision led Apple's share price to fall 5.1%.
A safe haven
Apple has been seen as a safe haven for tech investors in 2022 because of its ability to retain more of its market value than most other tech companies. September marginally spooked investors concerned that slowing consumer demand might finally be coming after the iPhone company. However, the company still makes up 41% of Warren Buffett–run holding company Berkshire Hathaway's (BRK.A -0.97%) portfolio. The prominent investor's confidence suggests Apple won't be down forever.
I hope APPLE can keep my money healthy as long as can be...
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