Three Reasons Apple’s Shares Took A Drubbing – Forbes
There was a general sell-off of tech stocks on Friday but Apple was hit harder than most of them. Its shares fell $6 or 4.9% while the NASDAQ fell 1.8%. It also fell more than any of the four FANG (Facebook, Amazon, Netflix, Google/Alphabet) stocks. Being the largest market cap stock is one reason since it means the stock has very good liquidity. If portfolio managers want or need to raise a lot of cash it typically wonâ€™t move the stock price very much if they need to sell a large position.
New iPhones could be at a disadvantage
Maybe the â€œbiggestâ€ reason for the stockâ€™s selloff was a Bloomberg article that Apple would be using Qualcomm and Intel modems in the upcoming iPhone 8 but that Intelâ€™s modem speeds wonâ€™t match Qualcommâ€™s. So that all iPhones perform the same Apple would slow down the Qualcomm iPhones but that will put the new iPhones at a disadvantage versus the competition.
Besides wanting to have two suppliers Apple is having a contentious relationship with Qualcomm as it is suing Qualcomm over royalty payments. This is another reason that Apple would want to have a second supplier but could force Apple to ship an inferior product.Â Apple has sold lower function products before without impacting its market share to a large degreeÂ but if there is a major difference in download speeds this is definitely not a positive.
Bullish analyst had some weak numbers
Brian White, who is a major bull on the shares, tracks monthly sales of Apple suppliers to try and gauge the outlook for Apple. He published a note on Friday that while the suppliers May results were better than historical averages if the June numbers are in-line with history that the June quarter would show a 3% quarter to quarter decline vs. an average increase of 12% for the past 12 years.
Tracking Appleâ€™s supplier results donâ€™t match up to Appleâ€™s results exactly with one reason being the lag time between when the parts are sold by the suppliers to when the final product is sold by Apple. So if Whiteâ€™s numbers are accurate (or not off by much) what it portends is a weaker outlook for Appleâ€™s September quarter, not June quarter results.
Currently the sell-side analysts are expecting September quarter revenue of $50.52 billion which would be an increase of 13.8% when compared to the mid-point of Appleâ€™s $44.5 billion in revenue guidance. This would even be stronger than when the larger screen iPhone 6 and 6 Plus became available in September 2014 and would be the largest increase since the iPhone 4 was launched in 2010.
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