Apple is sort of like those Icelandic or Swiss banks that were larger than their home country GDP, a splendid asset unless it blows up.
As a component of the Dow Jones Industrials and as the largest capitalization in the Nasdaq 100 and the S&P 500 there is a lot of money riding on Apple
From Bloomberg via Yahoo Finance, May 4:
After blowout results from Microsoft Corp. and Meta Platforms Inc. spurred huge rallies in their stocks, there are concerns the bar has been set too high for Apple Inc.
Not only does the iPhone maker trade at an elevated valuation to peers after a market-leading 29% rally in the year to date, but it also comes with a weaker growth outlook. Second-quarter results due after Thursday’s close are expected to show a 4.8% drop in revenue and a 5.8% slide in earnings, according to consensus analyst estimates, paving the way for a first year of declining sales since 2019.
“It isn’t as though the business is going downhill, but it is very highly valued, especially since we no longer have the perfect backdrop for tech,” said Daniel O’Keefe, who manages about $36 billion as a portfolio manager at Artisan Partners. “Apple has to grow a lot to generate good returns from here, and there’s no reason to think the growth it has seen over the past several years will continue at that pace.”
Compared with the stellar results from the likes of Microsoft and Meta, Apple’s report is likely to make for more sobering reading. UBS Group AG analysts warned on Monday that US iPhone demand had “notably softened” in March, while Bloomberg Intelligence expects the smartphone market to drop 4% this year, with weakness concentrated in the first half of 2023. A disappointing forecast from Qualcomm Inc. on Wednesday underlined concerns about smartphone demand....
....MUCH MORE
Our thought in the outro from April 23's "Amazon and Microsoft’s AI Gains Mask Cloud Slowdown":
There is quite a bit of market cap balancing on those two divisions of those two companies.
With its 3% up-move on Friday Amazon is back over a trillion in cap, MSFT is at $2.1 trillion. Throw in the two classes of Google at $1.3 trillion and the SPY is like an upside-down pyramid balancing on the tippy-tip. It's even more ridiculous if you look at the Nasdaq 100.
That being said, a more interesting question might be "what could knock 25% off of Apple's $2.6 trillion market cap?"
AAPL closed at $165.02 on Friday and it wasn't that long ago (first week of January) that it was at $125.
The stock is now changing hands at $164.78 down $2.67 (-1.59%) pre-market, after trading over $170 earlier this week.
