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As Apple feels the heat from the coronavirus, AAPL stock is plunging and it looks like things might get worse for other tech stocks as well.
Several companies and stocks in general, are still feeling the unpalatable effects of the coronavirus outbreak. Because of several restrictions placed by Chinese authorities as well as other governments, these businesses are taking a hit. The decline inevitably means that their stocks are also suffering. Apple Inc. (NASDAQ: AAPL) stock has felt this decline firsthand and began to lose some weight on Friday amid coronavirus fears.
Apple (AAPL) Stock Falls
On Friday, at first, AAPL plunged almost 1%, to trade at $316. This was a response to Apple considering allowing iPhone users access to rival apps as default for browser and mail functions. AAPL eventually closed at $313.05 after dropping 2.26%.
Sadly, AAPL has dropped further. Current market figures show that the stock has lost more than 4% in premarket value and is trading at $299. Even though there might not yet be any cause for alarm, Apple (AAPL) stock has lost almost 4% in the last 5 days. Market analysts suggest that this might not be the end of Apple stock woes, because of the coronavirus.
Last week, Apple said because of the coronavirus, it will fall short of its predicted revenue for the quarter. The company said at the time that manufacturing is “temporarily constrained” and even those who have resumed are moving a lot slower. Apple also said most stores have closed and so sales are suffering.
Other Tech Stock Might Join the Apple (AAPL) Plunge
Apple stock might not be the only issue. Popular investor Paul Meeks has piled on the bad news. In a conversation with CNBC’s Trading Nation, Meeks said that tech stocks could take a serious hit. Firstly, Meeks believes that Apple stock is overvalued. Secondly, he sees a possible 20% AAPL stock plunge because of the coronavirus. The investor believes that the tech market should be robust, if not for the virus.
“There is some comeuppance due, and unfortunately I think the coronavirus is that exogenous variable that is a catalyst to take some of these stocks down.”
Stock markets, in general, are also shaky. For example, the Nasdaq 100 futures dropped 1.7% with both the Dow Jones futures and S&P 500 futures losing 1.3% respectively. The drop is also visible in the price of crude as that is also losing some weight. The gainer here, unsurprisingly, is gold.
Apple Is Loosening Up
In addition to allowing iPhone users some access to rival apps, Apple is also reportedly considering making changes to its HomePod. Apple’s HomePod wireless speaker has trailed behind other similar products like the Google Home or Amazon’s Echo. The HomePod’s price did nothing to help as it seemed ridiculous to buy it at $349, at launch, when the Echo cost $99.
However, Apple wants to allow third-party music apps some access. This means that iPhone users who prefer to subscribe to Spotify, instead of Apple Music, will now have equal access to the HomePod’s features.
Last year, Apple’s share of the smart speaker market was less than 5%. With a move like this, the company hopes that users will now have more reason to use the HomePod and drive up the company’s market share.