Apple shares are off to their worst-ever start to begin a year as investors fret over a series of issues plaguing the tech giant – including signs of weak iPhone demand and mounting federal antitrust scrutiny.
The Cupertino, Calif.-based company’s valuation plummeted by $177 billion in market value through last Friday since the start of 2024, Bloomberg reported.
The stock fell more than 6% during the shortened opening week — leading to the largest decline in a company’s market cap on record over the same period — and put Apple at risk of losing its title as the world’s most valuable company.
Shares were hit after a report surfaced that the Justice Department was in the “late stages” of filing a massive antitrust lawsuit against Apple.
The feds are investigating whether Apple has stifled competition and leveraged its hardware and software products to maintain the iPhone’s dominance over the market.
A DOJ antitrust lawsuit “would add to the plethora of problems it faces, from slowing iPhone sales to Watch patent issues,” according to Bloomberg Intelligence analyst Anurag Rana.
“The suit could attack Apple’s business model of tightly integrating its devices and services,” Rana added.
Apple shares were up around 1% in early trading Monday.
As of this morning, Apple’s market cap hovered at $2.85 trillion, while Microsoft trailed just behind at $2.75 trillion.
The DOJ’s probe into Apple’s business practices surfaced in the same week that a pair of firms downgraded their ratings for the company’s stock due to concerns about iPhone sales.
Piper Sandler & Co. analyst Harsh Kumar warned clients that “growth rates have peaked for unit sales” for the iPhone.
The firm also cited the ongoing dispute that led officials to implement a sales ban on the latest Apple Watch model due to alleged patent infringement – a move that a US appeals court has since paused.
Elsewhere, Barclays downgraded Apple’s stock to “underweight” from “neutral” and lowered their price target for the company’s shares to $160, down from a previous target of $161, due in large part to signs of weak demand for the iPhone in China and developed markets.
Wall Street will be watching closely as Apple prepares to release its $3,499 “Vision Pro” virtual reality headset – its first major product release in years.
On Monday, Apple said the Vision Pro will be available for preorder beginning on Jan. 19 and would hit stores on Feb. 2.
Source
