By
Godfrey Benjamin
April 23rd, 2024
AAPL shares have traded sideways since hitting an ATH of $182.94 earlier this year.
Apple Inc (NASDAQ: AAPL) shares closed Monday trading at $144.22, 2.63 percent lower from the day’s opening price. While the bleeding has stopped in the after-hours trading session, market strategists forecast more decline in the near future as production in Foxconn Technology Group – the Taiwanese company that operates Apple crucial products – remains hampered by the protests against Covid restrictions. As such, Apple and Foxconn anticipate making up for the 6 million iPhone units in 2023.
The supply shortfall has significantly affected Apple customers in the pipeline of receiving the latest device, the iPhone 14 Pro. Moreover, United States Apple customers wait about 33 days to receive their iPhone 14 Pro and Pro Max models. Mind you, in-store pickups for the latest devices are reportedly unavailable.
“The ongoing challenges around delays in returning to a normal production level at the Zhengzhou facility could limit the pace with which supply-demand equilibrium can be reached in the coming months,” JPMorgan analysts said.
Notably, Wedbush Securities analysts estimated that the production halt could affect 5-10 percent of iPhone units in the current quarter. Should the production slowdowns sustain until December, KGI Securities analyst Christine Wang estimated that the figure could come in at around 10 million iPhone units, hereby representing 12 percent.
AAPL Shares and the Market Outlook
AAPL shares have traded sideways since hitting an ATH of $182.94 earlier this year. As a technology company, market strategists are optimistic the company will outperform in the coming quarters. According to a survey conducted by MarketWatch, 43 ratings have given AAPL shares an average target price of $175.69 and an average recommendation of Overweight.
During the fourth quarter, which ended on September 24, the company demonstrated its tech dominance with a healthy balance sheet.
Luca Maestri, Apple’s CFO, said:
“We continued to invest in our long-term growth plans, generated over $24 billion in operating cash flow, and returned over $29 billion to our shareholders during the quarter …. This quarter capped another record-breaking year for Apple, with revenue growing over $28 billion and operating cash flow up $18 billion versus last year.”
Despite the global geopolitical differences and unpredictable macroeconomic factors, Apple has demonstrated the resilience acquired over decades of existence. According to market data from MarketWatch, Apple has a market capitalization of approximately $2.36 trillion. In other words, Apple’s market cap is three times that of the cryptocurrency market.
The tech company has continued to widen its market scope to increase revenue collection. Moreover, Apple’s competitors are hard at work developing more cutting-edge technology with market demand and affordable prices.