Apple’s stock market value falls below $2 trillion

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(Corrected the first paragraph to show that it was the first time Apple’s market cap has closed below $2 trillion since March 2021, not June 2021)

Jan 3 (Reuters) – Apple Inc’s stock market value fell sharply on Tuesday after its steep decline last year, putting it on track to ending up below $2 trillion for the first time since March 2021.

The sale comes a year after the iPhone maker became the first company to hit the $3 trillion market capitalization milestone.

Apple shares fell 4% to $124.60 after Exane BNP Paribas analyst Jerome Ramel downgraded the company to “neutral” from “outperform,” and cut his price target to $140 from $180, according to Refinitiv Eikon.

Ramel cut its iPhone shipment targets for fiscal 2023 to 224 million units from 245 million units, reflecting supply chain issues from manufacturer Foxconn and consumers cutting back on spending on high-end phones -end.

At Apple’s current stock price, the company is worth $1.98 trillion, just ahead of Microsoft Corp, which is currently valued at $1.78 trillion.

Underscoring investors’ worries that a slowing global economy and high inflation could be hurting demand for Apple devices, analysts on average expect the Cupertino, California-based company to report a 1% decline in -income of the December quarter in the coming weeks, according to Refinitiv. This marks Apple’s first quarterly revenue decline since the March quarter of 2019.

“They (Apple) tend to target the high-end consumer device customer but even that demographic can be affected by the high price of everything,” said Kim Forrest of Bokeh Capital Partners.

Last year’s strong sell-off on Wall Street punished technology-related heavyweights as investors worried about rising interest rates dumped stocks with high valuations.

The combined stock market value of Apple, Microsoft, Amazon.com Inc, Alphabet Inc and Meta Platforms now accounts for about 18% of the S&P 500, down from as much as 24% in 2020.

Even after its 27% decline last year, Apple provided stellar returns to long-term shareholders. Investors who bought and held Apple shares when co-founder Steve Jobs launched the iPhone in 2007 have enjoyed returns of more than 4,000%, excluding dividends, compared to a 180% return in the S&P 500 during the same period.

(Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur and Richard Chang)

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