Apple shares plunged following an unprecedented number of analysts downgraded its rating, exacerbating another wave of selling pressure that wiped hundreds of billions of dollars off the market value of the largest US technology shares.
Shares of the “iPhone” manufacturer fell on Thursday, by 4.9%, following “Bank of America” lowered its recommendation towards the stock from buying to neutral, warning of weak consumer demand for the popular “iPhone” devices. The sale also wiped out nearly $120 billion from the market value ofApple company.
Apple shares have been seen as a safe haven for the rest of this year, outperforming fellow big companies and the broader technology scale amid a sharp sell-off driven by recession fears. The shares of the world’s most valuable company, with a market value of regarding $2.3 trillion, fell by regarding 20% in 2022, compared to a 32% decline in the “Nasdaq 100” index, according to Bloomberg Agency.
With consumer spending expected to slow across regions, Bank of America analysts have pointed to slowing demand for Apple’s services, and demand for the company’s products is likely to catch up. They said the pressure from a strong dollar would only exacerbate the problem.
Although “Apple’s long-term prospects remain favorable”, Bank of America expects negative discretionary reviews and assessment risks in the near term.
In this context, the Nasdaq 100 is headed for its longest streak of quarterly declines in 20 years, however; Investors are still bracing for more pain as the Federal Reserve raises interest rates, and Wall Street analysts are beginning to cut earnings estimates.
Estimates of tech companies’ 2023 earnings growth in the S&P 500 have fallen regarding 6 percentage points since the start of 2022, compared to a 4 percentage point drop for the broader index, according to data compiled by Bloomberg Intelligence.
