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Rout Continues
Shares in Apple remain under heavy selling pressure this week as the stock extends its recent decline. Apple shares are now trading down around 14% from their recent highs, despite the broader rally we’re seeing in US tech stocks currently. Indeed, with Apple having shed around $300 billion of its overall value during this rout, the company has lost its status as America’s most valuable company, a title which has now gone to Microsoft. Many other big tech names such as Meta, Nvidia and Alphabet are enjoying strong gains currently, so the question is, what’s up with Apple?
Apple Facing Key Issues
Currently, the tech giant is facing a number of key issues such as regulatory pressure, plunging sales in China and concerns over weakened growth prospects. Apple is currently dealing with a $1.95 billion EU antitrust action, as well as the prospect of further regulatory challenges. In China, sales have been on the decline recently, with sales of Apple iPhones sinking by 24% over the first six weeks of 2024. This drop in sales mirrors a broader drop in demand for iPhones globally. Finally, investors were left disappointed by the sales guidance offered at Apple’s last earnings call, despite Apple beating EPS and revenues forecasts.
Near-Term View
Looking ahead, with other major tech names seeing sizeable rallies, Apple looks likely to remain pressured near-term as traders reallocate capital to better performers. Indeed, with the Nasdaq dropping sharply from highs yesterday, things may get worse for the stock near-term if we start to see a broader pull back in tech names.
Technical Views
Apple
The sell off in Apple has seen the stock breaking down through several key support levels recently. Price is now fast approaching a test of the next major support at 167.45. Given the weakness in momentum studies, risks of a downside break are building which, if seen, would raise flags for a potential trend reversal in the stock.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.