Apple’s Market Cap Dropped by Over $200 Billion in Just Two Days; Here’s Why
After China announced intentions to extend its ban on the use of iPhones to state-owned businesses and organizations, Apple shares fell precipitously, wiping off more than $200 billion of market value in only two days.
According to estimates, the IT giant’s stock dropped as much as 5.1%, extending its two-day decline to 6.8%. The largest component of US market indices, Apple, is contributing to a wider selloff that was partly spurred by a long list of problems in China.
It should be mentioned that the manufacturer of the iPhone considers China to be both its largest international market and global manufacturing hub.
Even if the US economy is still proving to be resilient, Apple faces new difficulties as a result of the recent bond sell-off. Concerns about the Federal Reserve’s need to step up its efforts to control inflation are what are causing this sell-off.
The most recent news is having a huge influence on the markets and forcing investors to sell a variety of assets, including semiconductor stocks, mega-cap technology businesses, and Chinese shares that are traded on US exchanges.
As one lousy Apple ruins a number of mega-cap tech firms, the Nasdaq is falling. According to Bloomberg, Edward Moya, senior market analyst at OANDA, “Apple’s growth story is heavily dependent on China and if the Beijing crackdown intensifies that could pose a big problem to the bunch of other mega-cap tech companies that depend on China.”
A cascade impact on numerous other US technology businesses that significantly depend on sales and manufacturing in China may result if the Chinese government moves through with the ban on the use of iPhones and other foreign-branded gadgets by government employees.
The confirmation of China’s recent regulatory changes led to a decrease in stock prices for Apple suppliers globally on Thursday. The effect of a “iPhone ban is being exaggerated,” according to Daniel Ives of Wedbush Securities, who claims that it may only affect less than 500,000 of the 45 million iPhones that are anticipated to be sold in the nation during the next year.
