The tech giant loses $160 billion and has now officially entered the Bear territory.
The Silicon Valley Giant, Apple Inc. lost more than $160 billion since July, 2015 due to the weakening demand for smartphones. The latest drop that the tech giant witnessed was of 2.7% on Friday and was being traded at a share price of $106.03 which, according to USA Today, indicates that the stock of the tech corporation is entering the bear territory.
On Friday, the corporation approximately lost $160 billion which indicated a drop of 21% from its all-time recent high of $134.54. The amount that the tech corporation lost is more than the market value of over 477 companies listed on the S&P 500. Furthermore, USA Today stated that the market value that the multinational technology corporation lost is equivalent to the total market value of companies such as Nike, Inc. PepsiCo and IBM.
Apple stock is widely popular amongst individual investors. Being the most important stock in terms of market value, it is a huge deal that the company has lost so much. Despite of the fact that it has lost billions, it is still considered worth more than many other United States companies. The sole reason for this decline resides in the fact that the demand for smartphones has declined drastically in the last few months. Analysts at this point are sure that the demand is expect decline furthermore in the fourth as well as the first quarter of the following fiscal year.
Even though the tech corporation works on many other gadgets, the most revenue and profit that the company earns came from its smartphone division. According to S&P Capital IQ, many analysts are not estimating the adjusted earnings of the company to come down to $3.24 per share in the 4th quarter. They have also cut price targets and earnings estimates and the profit has also been cut by 2.4% in comparison to a month earlier.
63% of the corporation’s revenue was generated from the iPhones in the previous quarter which indicated an increase of 7% from its earnings a year ago. According to Katy Hudson, an analyst at Morgan Stanley, the iPhone sales are likely to fall by 6% this year, making the sales of the smartphone go down to 218 million devices from initial sales of 231 million in the current year.
It’s evident that the tech giant is running out of ways to increase the sales of its new iPhone. The corporation has already tried to do so by releasing phones with even bigger screens, better leasing programs and also signing a deal with China’s largest carrier – just so it could attract more customers towards iPhones every year.
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