Apple Inc’s stock market value shrank sharply on Tuesday following its steep drop last year, leaving it below $2.0 trillion for the first time since March 2021.
The sell-off came a year after the iPhone maker became the first company to reach the $3.0 trillion market capitalization milestone, according to Reuters.
Apple's shares declined 3.7 per cent to $125.07 after Exane BNP Paribas analyst Jerome Ramel downgraded the company to "neutral" from "outperform," slashing his price target to $140 from $180, according to Refinitiv Eikon.
Also exacerbating investors' worries that a slowing global economy and high inflation may be hurting demand for Apple devices, Nikkei reported, citing unnamed suppliers, that Apple has told suppliers to manufacture fewer parts for its earbuds, watches and laptops.
The drop in Apple's share price put its market capitalization at $1.99 trillion.
Ramel cut his 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 spending on high-end phones.
At Apple's current stock price, the company's value is just ahead of Microsoft Corp, valued at about $1.8 trillion.
With investors worried about consumer demand, analysts on average expect the Cupertino, California company to report a 1 per cent drop in December-quarter revenue in the coming weeks, according to Refinitiv. That would mark Apple's first quarterly revenue decline since the March quarter of 2019.
"They (Apple) tend to skew to the high-end consumer device customer but even that demographic might be being affected by the high price of everything," Bokeh Capital Partners' Kim Forrest said.
Last year's steep sell-off on Wall Street punished tech-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 per cent of the S&P 500, down from as much as 24 per cent in 2020.
Even after its 27 per cent drop last year, Apple has provided stellar returns to long-term shareholders. Investors who bought and held Apple shares when cofounder Steve Jobs launched the iPhone in 2007 have enjoyed a gain of over 4,000 per cent, not including dividends, compared to a 180 per cent gain in the S&P 500 over the same period.
