Apple Inc’s (NASDAQ: AAPL) market value has dipped below the once-historic milestone of $3 trillion, triggered by concerns over the company’s fourth-quarter outlook.
The apprehension arises from worries about sluggish demand for smartphones and other electronic devices. Apple’s third-quarter results on Thursday failed to impress Wall Street, and the stock promptly reacted with a move to the downside.
On Friday, the company’s shares experienced a decline in pre-market trading due to weaker fiscal year third-quarter hardware product sales, except for Macs, and disappointing guidance for the September quarter.
Shares of the company experienced a significant drop of 4.8%, leading to a market capitalization of approximately $2.85 trillion. This decline, the largest for Apple since September, translated to a staggering loss of over $160 billion in market value, reports Bloomberg.
Apple’s fiscal third quarter tends to be the slowest, as it precedes the back-to-school season, and customers often delay purchasing key hardware products in anticipation of newer iterations being released.
The third-quarter gross margin remained relatively stable at 44.52%, almost unchanged from the previous quarter’s 44.26%. Compared to the same period a year ago, the metric has grown 43.26%.
Just a couple months ago, in June, Apple made history by becoming the first company to achieve a market value of $3 trillion.
However, the recent market downturn has brought its valuation below that historic milestone.
Bloomberg reported that Rosenblatt Securities downgraded the stock to neutral, saying the mixed report “highlights the slowdown phase in which Apple now sits.”
“Even though the company’s Services business is accelerating, a slowdown in the U.S. seems likely to last until a material new product category takes hold,” it said.
So far in 2023, Apple Inc. has surged 49% iin a rally by severl of Wall Street’s most valuable companies, fueled by bets that the Fed is nearing the end of its campaign of interest rate hikes, and by optimism about the potential for artificial intelligence.
Apple’s most recent quarterly report in May showed revenue and profits fell but still beat analysts’ expectations. Along with a steady track record of stock buybacks, the financial results reinforced its reputation as a safe investment at a time of global economic uncertainty.
Produced in association with Benzinga