Apple shares touched their lowest level since June in 2021, amid an ongoing selloff of big-tech stocks amplified by concerns over iPhone supply during this key sales period.
The shares fell 1.4% at one stage even as Apple remains a relative outperformer for 2022, with a 27% decline that is narrower than the 33% drop for the Nasdaq 100 market index as a whole. In the past month, it has lagged the index.
Recent weakness has come as production halts in a major iPhone plant in China contributed to a supply shortage of Apple’s flagship product.
Analysts at JPMorgan wrote that iPhone supply is “improving and inching slowly towards parity with demand”, although it added that Apple is typically “much further along in reaching parity between iPhone demand and supply” at this time in the year. Due to this issue, the JPMorgan analysts expect results in Apple’s December quarter to be “muted” relative to consensus expectations.
Tech was broadly lower on Tuesday.
Meanwhile, the tailspin for Tesla shares accelerated as a report of a plan to temporarily halt production at its China factory rekindled fears about demand risks and put the stock on pace for its longest losing streak since 2018.
Shares of the Elon Musk-led company fell as much as 8.3% on Tuesday. The electric-vehicle maker’s market valuation has shrunk to roughly $357bn (€335bn), with the latest selloff likely costing Tesla its position among the 10-highest valued companies in the S&P 500 Index, a distinction it has held since joining the benchmark in December 2020.
News of reduced output in Shanghai comes on the heels of last week’s report that Tesla was offering US consumers a $7,500 (€7,040) discount to take delivery of its two highest-volume models before year-end, combining to intensify concerns that demand is ebbing . For Tesla, whose valuation is pinned on its future growth prospects, these worries reflect a significant risk.
“Most of the stock’s weakness this year is due to indicators showing flagging demand globally,” said Craig Irwin, an analyst at Roth Capital Partners. Tesla’s estimated revenue growth “is still amazing, but not $385bn market valuation-type amazing,” he said, referring to the value at the end of last week.
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