Apple
stock’s bad start to the year only seems to be getting worse.
The stock, which has fallen on all three trading days so far in 2024, looked set to open lower again Friday as it pointed 0.9% lower in premarket trading.
If that price holds through the close it would be Apple’s longest losing streak to open a new year since 1982, the last time it fell in the first four days of a calendar year, according to Dow Jones Market Data.
But the stock has had worse starts to the year in percentage terms in recent memory. In the first four days of 2019 it dropped 6.2% and in 2016 it was 8.4% down after four days.
The bad start doesn’t necessarily set the tone for the year ahead. The stock ended the year higher in 2016 and 2019.
In fact, Apple stock has fallen more than 5% in January five times in the past 20 years, according to FactSet data. On four of those occasions it went on to post an annual gain.
In three of those instances the shares recouped their January losses by the end of April and on another it took until November. The only year it didn’t was 2008. It took Apple stock until October 2009 to return to its year-end 2007 price.
Apple downgrades tend to arrive in groups. Barclays analysts downgraded the stock to Underweight from Equal Weight earlier this week, noting weakness in sales of iPhones and Mac computers. Piper Sandler analysts made it two downgrades in a week for the world’s most valuable company, moving their rating to Neutral from Overweight Thursday.
They, too, focused on the iPhone and concerns that growth rates have peaked for unit sales and over a weakening macroeconomic environment in China.
To make matters worse, Apple also lost market share in smartphones in 2023, according to data published this week by Counterpoint Research. Finally, the broader technology sector has endured a tough start to the new year as investors have begun reassessing the probability of Federal Reserve rate cuts beginning in March.
The upshot of all that is that Apple stock has already fallen 5.5% in 2024.
Its status of the world’s most valuable company suddenly appears under threat.
Microsoft
closed on Thursday with a market capitalization of $2.7 trillion, about $100 billion less than Apple. That sounds like a lot—and it is—but it’s also the smallest gap between the two since November 2021.
With Apple underperforming
Microsoft,
largely flat ahead of the open, early Friday, the gap looks set to narrow again.
Write to Callum Keown at [email protected]
Read the full article here