Apple's 2024: Market Value Drops $107.1 Billion Overnight

Apple's stock experienced a bleak start at the beginning of 2024. On the first trading day of the year, its market value evaporated overnight by $107.1 billion, approximately ¥766 billion, marking the largest single-day drop since August 2023 and setting a new closing low since November 2023.

Market Background

The overall performance of the U.S. stock market was lackluster on the first trading day of 2024. The Dow Jones Industrial Average barely rose by 0.07%, while the Nasdaq Composite Index fell by 1.63%, and the S&P 500 Index dropped by 0.57%. This market trend reflects widespread concerns among global investors about the economic outlook. Simultaneously, the benchmark 10-year U.S. Treasury yield rose by 7.7 basis points to 3.937%, marking the largest single-day increase in over three weeks. This rise indicates a diminished expectation in the market for the Federal Reserve to lower interest rates in 2024, adversely affecting the appeal of growth stocks.

Analyst Perspectives

Barclays analyst Tim Long and his team downgraded Apple's stock rating from "Hold" to "Underweight," predicting a potential 17% decline in Apple's stock price over the next year. They noted that Apple failed to meet market performance expectations in several quarters over the past year, despite its stock outperforming others. The analysts anticipate a shift in this trend. Additionally, the sales and features of the new iPhone 15 fell short of expectations, and they predict a continuation of this trend with the iPhone 16.

Market Reaction

Following Barclays' negative rating, Apple's stock further declined by 2%. Due to sluggish iPhone sales, Apple is expected to face approximately a 17% loss in 2024. This news impacted the entire tech stock market, leading to a morning session with several tech giants experiencing declines in their stock prices.

Summary

The trajectory of Apple's stock reflects the current market's uncertainty and pessimism towards tech stocks. With the unstable global economic environment and declining sales of Apple products, investors and market analysts need to reassess its long-term value and investment attractiveness. Furthermore, Apple's future strategies and market dynamics will be crucial factors influencing its stock price.