Apple has just lost hundreds of billions in value with its stock tanking 8%. The Cupertino giant's $200 billion loss in value resulted in both the Dow and Nasdaq indexes slumping as well.
Apple Joins Other Tech Giants in a Bear Market
According to the story by CNBC, Apple has officially joined the other tech giants in a bear market. Due to the fears of Fed rate hikes, holders and investors have started a mass sell off in stocks in almost every industry and Apple is no exception.
As per the article, aside from Fed rate hikes, rising inflation, consumer confidence going down, and global supply chain have contributed to this.
To add, The Nasdaq Composite is on track for a "six-week losing streak" and is down by more than 7%.
Supply Chain Challenges have Affected the Cupertino Giant
Supply chain challenges have also been a major issue Apple is facing along with other tech companies. CNBC says that the company was considered by investors as a "safe" place for their money after recently dropping the title of the most valuable company, as reported by BBC.
As previously reported here on TechTimes, Apple's market value sits at $2.37 trillion while Aramco, a Saudi Arabian oil company, took the spot as the most valuable company in the world.
The article also says that the sell-off of Apple is a sign that investor confidence is now dropping and due to the fact that it is being sold off, this could be a "bad sign for other stocks." Jeff DeGraff of Renaissance Macro Research said that Apple is not excempted from the bear market.
AAPL Stock Could Continue to Decline
As per Nick Colas, the co-founder of Datatrek, their assumptions is that the sell-off of AAPL will continue due to the fact that it is rare for investors to dump all stocks at once. Usually, investors would take more than a day to sell of "best-of-breed names."
The decline started in November with other tech stocks first falling and now, Apple, the second largest company in the world, has also started falling as well. During that time, some investors felt that it was better to invest in Apple as a safe bet when the market was declining.
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Company Blames Chip Shortage for iPad Business Not Kicking Off
Apple, however, can afford to return profit to shareholders due to its prodigious cash flow since in its March quarter, the company was still able to generate operating cash flow at $28 billion. This will also allow the company to endure the slowdowns.
During that time, Apple was able to generate its $28 billion operating cash flow while spending $27 billion during the March quarter in order to pay dividends and repurchase shares. The company raked in $97.3 during that quarter.
iPhone sales have also been affected by the fact that consumer confidence has started to weaken. Apple put blame on the chip shortage for the reason behind why the iPads did not grow while the company's other businesses did.
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This article is owned by Tech Times
Written by Urian B.
