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Apple entered 2023 with a reduced market cap that has fallen below $2 trillion, a big change from the $3 trillion exactly a year earlier.
On Tuesday, Apple’s market cap shifted from over $2 trillion to under $2 trillion after early morning trading. Shares fell by more than 3.5 percent on Tuesday, putting Apple at its lowest stock since June 2021.
The drop to less than $2 trillion is a huge change in Apple’s fortunes as it became the first and only company to $3 trillion market capitalization barrier on January 3, 2022, exactly one year ago. According to to the Financial timesApple continues to outperform its peers as while it has lost 27% of its value in 12 months, the Nasdaq Composite saw a 33% loss.
The drop, which could be temporary, is thought to be a case of investor jitters after months of supply chain problems hit some of its most popular and lucrative products. Problems with the Zhengzhou factory in China has led to massive shipping delays iPhone 14 Pro and iPhone 14 Pro Max models, during a typically high sales period.
When the problems came to light, analysts repeatedly stated that the shipments would be delayed millions of unitsand have in turn lowered their forecasts. For the quarter, analysts now expect net profit to fall 8% year over year.
Part of the reasons for the troubles is China’s easing of notoriously strict COVID restrictions, which had led to more lockdowns and infections. On Tuesday, reports claimed Apple had done just that cut orders for most of its products from parts suppliers in China.
“The current state of COVID-19 in China is the biggest wildcard for Apple’s calendar 2023 business results,” said DA Davidson & Co. analyst Tom Forte.
Despite the dip, Apple is still the largest tech company, followed by Microsoft with a market cap of $1.8 trillion.