Apple Stock Faces Technical Problem: Morning Brief

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Apple Stock Plummets Amidst Chinese Crackdown

Apple (AAPL) is currently facing a technical problem as its stock has plummeted over 6% in the last two days, marking its biggest back-to-back slide in 10 months. Chinese officials are reportedly asking government employees to stop using iPhones, resulting in a loss of about $200 billion in market capitalization since Monday.

Shaky September and iPhone 15 Launch Event

The decline in Apple’s stock comes at a time when the stock market is experiencing a shaky September. Additionally, Apple fans are eagerly awaiting the iPhone 15 launch event scheduled for next Tuesday. The event is expected to introduce new features such as enhanced periscope zoom, a new charging port (USB-C), and possibly new color options.

The Issue Lies in Apple’s Stock Chart

Contrary to popular belief, the current technical issue facing Apple is not related to its products or services. The problem lies in the company’s stock chart. Just a month ago, Apple stock reached a record high, only to quickly experience a significant selloff. The speed of this selloff was unprecedented in the company’s history.

Historical Trends and Analyst Predictions

Analysts have noted that Apple stock typically rallies leading up to its events but then sells off afterwards. Historical data from Yahoo Finance reveals that September has consistently been one of the stock’s worst months, with negative returns in 10 of the last 12 years after the iPhone launch. JPMorgan’s Ron Adler suggests that Apple stock is behaving uncharacteristically defensively, lagging behind other AI stocks in terms of performance.

Comparisons to IBM and Investment Outlook

Apple is currently facing three quarters of declining year-over-year revenue growth, leading some to compare it to tech stalwart IBM. Bernstein highlights two takeaways from IBM’s experience that could apply to Apple: the importance of revenue growth and the need for strong profit growth to maintain a high stock valuation.

Adler at JPMorgan predicts that if the current trends continue, investors may choose to sell Apple stock after the iPhone event and invest in Meta, Microsoft, and Nvidia, which are his team’s top three picks.

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