Apple may lose the crown of the most valuable stock by market value this year, fear analysts

Technology giant Apple, which has held the title of the world’s most valuable publicly-listed company since July 2022, is at risk of losing its crown this year, as mounting pressures and challenges take a toll on its market value.

Investors are expressing concern over the company’s recent performance, marking its worst start to the year by some measures.

The company’s shares experienced a 0.4 per cent decline on Friday, closing at approximately US$181. This downturn follows reports from The New York Times indicating that the US Justice Department is nearing the filing of an antitrust case against Apple.

This development, coupled with existing challenges such as slowing iPhone sales and patent issues related to the Apple Watch, has intensified apprehensions among investors.

Bloomberg Intelligence analyst Anurag Rana commented that the potential antitrust case could target Apple’s business model, known for tightly integrating its devices and services. The Cupertino-based company has witnessed a continuous decline in its stock for five consecutive days, representing its longest losing streak since October.

While Apple has been the most valuable stock since July 2022, it has already lost approximately US$177 billion in market value in the current year, according to Bloomberg data.

This decline marks the largest market value destruction at the beginning of any year on record, even surpassing previous percentage declines in the first week of January.

The challenges for Apple began earlier in the week when the company faced two ratings downgrades, citing a weak macro environment in China impacting iPhone demand. This setback has narrowed its lead over Microsoft Corp, another technology giant, to less than US$100 billion.

According to the South China Morning Post, analysts and experts believe that investors are reacting to the rarity of two downgrades before an earnings report. Gene Munster, managing partner of Deepwater Asset Management, told South China Morning Post, “Investors realize how rare it is to have two people go negative.”

Additionally, market dynamics at the start of the year, where investors tend to rebalance their portfolios, are contributing to the pressure on Apple’s stock.

As a result of these challenges, Apple’s market value has now fallen to around US$2.8 trillion, approaching Microsoft’s US$2.7 trillion.

Microsoft’s more modest decline at the beginning of the year has been attributed to its involvement in the artificial intelligence trade, making it OpenAI’s largest shareholder with approximately US$13 billion invested in the ChatGPT parent company.

(With inputs from agencies)