By
Godfrey Benjamin
April 23rd, 2024
As part of a massive market crash on Monday, Big Tech companies ended up losing billions-of-dollars of investors’ wealth. Apple is the most-affected Big Tech company from the Coronavirus outbreak as it largely depends on China for its manufacturing.
On Monday, financial markets in the U.S. and across the globe plunged heavily on account of rising coronavirus cases outside China. The fall in the broader markets came after South Korea and Italy reported a sudden splurge in coronavirus cases on Sunday. The impact has been so severe even for the Big Tech companies. Big Tech stocks, assumed to fundamentally very strong, lost close to $250 billion combined in a single day due to the spreading coronavirus fears. This massive marketwide impact has further renewed the fears of a global economic slowdown.
BigTech is the group of the top five technology companies in the United States. The group includes Google‘s parent Alphabet Inc (NASDAQ: GOOGL), Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Facebook Inc (NASDAQ: FB), and Amazon.com Inc (NASDAQ: AMZN). These five tech companies alone constitute nearly 20% of the S&P 500 which fell 3.4% on Monday. The BigTech companies collectively lost a whopping $238 billion.
South Korea, Italy, and Iran have raised severe concerns over the coronavirus outbreak. South Korea raised its coronavirus alert to the “highest level” with over 700 infected cases. Similarly, Italy also confirmed a steep increase in newly infected cases. So far, 80,000 people have been infected globally with coronavirus, also called COVID-19.
Big Tech Companies Facing Majoring Manufacturing Challenges amid Coronavirus
As on date, Apple heavily relies on China for the manufacturing of its products. Thus, it has huge exposure to China when it comes to addressing its supply chain. Moreover, the situation in China looks far from under absolute control.
After the first massive outbreak in the Wuhan city last month, Apple’s manufacturing plants have been shut down by authorities to control the spread. Thus, Apple is also worried to meet the global demand of its newly launched AirPods Pro. Reportedly, Apple requires over 45 million AirPod units manufactured in the first-half of 2020. However, looking to the current situation analysts have doubts if Apple can achieve its targets.
On Monday, the AAPL stock dropped 4.5% slipping below $300 levels. Apart from Apple, other BigTech companies have little presence in China, with Google and Facebook having no presence at all. But due to the fall of the broader market, other BigTech companies also fell heavily on Monday.
As reported by CNBC, “Dow-component Microsoft fell more than 3%. Facebook, Amazon, Alphabet and Apple all closed at least 1.5% lower to drag the Nasdaq down.”
Until last week, the U.S. markets and indices were hitting new highs since the beginning of 2020. Some of the BigTech companies also participated in this market rally.