24/7 Insights
- Apple Inc. (NASDAQ: AAPL) stock could experience another 20% reset.
No one believes a stock that has traded as strongly as Apple Inc. (NASDAQ: AAPL) could experience a 20% reset. Think again. It happened in the past year. Apple traded at $194 in January and dropped to $164 in May, 84% of that high. Owners are on edge now. Apple announces earnings in less than a month. It must show that iPhone sales did not fall sharply ahead of the iPhone 16 launch in September and the release of what has been vaguely described as their new AI products. Apple is still the world’s most valuable brand.
Apple has given investors the taste of a bad quarter. Revenue ticked down 4% in the most recent quarter to $91 billion, insufficient to cause a selloff. However, the weakness of iPhone sales and Greater China revenue started showing worrying trends. iPhone revenue dropped from $51.3 billion in the quarter a year ago to $45.0 billion. Greater China’s revenue slipped from $17.8 billion to $16.3 billion.
The anxiety about China was that it is the largest smartphone market in the world by far. The worry about the iPhone is that its high price and lack of upgraded features from the iPhone 14 may not be enough to keep costumes on board. China’s market is exceptionally competitive because local smartphone manufacturers like Oppo and Vivo are popular.
Because Apple’s new product will be introduced well after the next quarterly announcement, Apple’s investors will need to sift through regional and iPhone sales. The iPad, Mac, and Services revenue won’t compensate for a big iPhone dip. The Chinese market sales are sometimes based on erroneous figures from third parties. Usually, Apple comments about its next quarter on earnings calls.
Apple’s shares have taken a beating this year and then recovered. The beating part could happen again.
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