Apple’s market value falls below $2tn as tech rout hits iPhone maker

Apple’s market value fell below $2tn in early trading on Tuesday, extending a sharp slide that has wiped roughly $1tn off its market capitalisation amid investor fears over disruptions to its China-based factories.

The dramatic fall in the iPhone maker’s market capitalisation represents a stark reversal from the first trading day of 2022, when Apple became the only company ever to reach a $3tn valuation. Shares in the company slipped by more than 3.5 per cent on Tuesday, pushing its stock to its lowest point since June 2021.

Apple has still performed better than its peers in the past year: it has lost 27 per cent of its value in the past 12 months, versus a 33 per cent loss for the tech-heavy Nasdaq Composite.

The staggering dollar-value dive reflects a broader wariness in the market as investors deal with a looming recession, persistently high inflation, and an abrupt reversal in global monetary policy following years of historically low interest rates.

Line chart of $bn showing Apple's market value falls back from all-time high

The iPhone maker’s business has performed strongly through the global coronavirus pandemic: Apple has reported 14 consecutive quarters of growth, and in the 12 months to September it posted a record $394bn of revenue and nearly $100bn in net profit.

According to Counterpoint Research, the company shipped just 14 per cent of all smartphones globally in the first nine months of the year, but it accounted for 43 per cent of all revenues and 82 per cent of all profits — its highest profit share since 2015.

Yet recent months have been chaotic for the tech giant, which said in early November it was experiencing “significant” disruptions in the assembly of high-end iPhones, following an outbreak of Covid-19 at a megafactory in Zhengzhou, China, run by Foxconn, its biggest assembler.

Analysts have since downgraded revenue forecasts for the lucrative holiday period, with Apple now widely expected to break its revenue-growth streak in the December quarter. Net profit is projected to fall 8 per cent.

The threat to Apple’s production has grown in recent months after Beijing loosened its strict Covid restrictions, and cases in the country are soaring.

“The current state of Covid-19 in China is the biggest wild card for Apple’s operating results in calendar 2023,” said Tom Forte, analyst at DA Davidson & Co.

Apple was the first publicly listed company to reach $1tn in August 2018, and the first company to ever reach $2tn in August 2020. It remains the only company to ever reach $3tn. There are now no tech companies worth more than $2tn, but Apple remains the largest, followed by Microsoft at $1.8tn.

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