The Apple Woes begins

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No investors will doubt that Apple is facing a difficult week even as the rosy outlook of the upcoming iPhone 15 is arriving. Shares of the mega smartphone company had fallen hard for the second day, wiping out around $190 billion of its market value. Still, it rests on a valuation above $2 trillion, as the shares had risen remarkably by over 30% this year.

Where will the stock price rest?

Analysts have a wide-ranging view. Some are calling for $150 as a pivotal point, while other analysts looking into historian price correction point to a darker level of $130.

One thing is certain: the upswing momentum is likely to have peaked around late July, and the faded strength of the stocks is likely to gain momentum as both TA and Fundamental look less rosy.

For the Fundamental Lovers

According to Wedbush’s Daniel Ives, the hit to Apple is expected to be around 500,000 units. This might seem small compared to around 45 million iPhones expected to be sold in China for the next 12 months.

However, a word of caution is brewing in the air as the calculation could signal further loss if the report from Bloomberg about the widening ban from government officials to even state companies’ workers is true. That could balloon the affected people to millions of people.

Hence, it rests on how aggressively the Chinese authorities want to pursue the cane action.

Apple supports millions of jobs in China.

More optimistic analysts point to the news as more of a headline than material damage to Apple’s future growth. After all, the company supported in excess of 5 million jobs in China in 2019. As such, for the Chinese government to impose more severe action, it will be to accept more damage to Chinese jobs.

Others question the degree of impact likely to be limited to only top leaders with the decision-making powers to be banned from using iPhones.

Recent years have seen Apple exploring to expand its production base out of China and into India. If Apple enhanced the momentum of such pace in shifting its supply chains out of China, this could disappoint the Chinese government further and unleash Beijing to use the “national security” card to further impose a tough business environment for US businesses in general, and that includes Apple where China commands around 19% of its revenue.

Investors can only hope for tension to cool down as the global economy is also facing multiple headwinds.

It is 8 Sept, Friday, 9.05 am in Singapore and 9.05 pm in New York. It is the final trading day of the week. Let’s wrap up the volatile week with a delightful day.