Apple’s Struggles Continue in 2024

Apple’s year is off to a rocky start with its stock falling for the third consecutive trading day in 2024. The stock is expected to open lower again on Friday, dropping by 0.9% in premarket trading.

If this trend continues and the price holds through the close, it would mark Apple’s longest losing streak to begin a new year since 1982. This was the last time the stock experienced a decline in the first four days of a calendar year, according to Dow Jones Market Data.

While this may seem concerning, recent history shows that Apple has faced worse starts to the year in terms of percentage. In both 2016 and 2019, the stock dropped 8.4% and 6.2% respectively in the first four days.

However, it’s important to note that a poor start to the year doesn’t necessarily dictate the stock’s performance for the rest of the year. In fact, in both instances mentioned earlier, Apple’s stock ended the year on a positive note.

Looking back at the past 20 years, FactSet data reveals that Apple’s stock has declined more than 5% in January on five occasions. Surprisingly, in four of those instances, the stock went on to post annual gains.

In three cases, the shares managed to recover from their January losses by the end of April, while in another instance it took until November. The only exception was 2008 when Apple’s stock didn’t recover its year-end 2007 price until October 2009.

Overall, it’s clear that Apple’s rocky start in 2024 is not uncommon and does not necessarily indicate future performance. Investors will be watching closely to see how the tech giant bounces back from this challenging period.

Apple Faces Downgrades and Market Share Loss in Challenging Start to 2024

Barclays analysts recently downgraded Apple’s stock to Underweight from Equal Weight, citing weak sales of iPhones and Mac computers. This downgrade was followed by Piper Sandler analysts, who also moved their rating from Overweight to Neutral, expressing concerns about iPhone unit sales growth rates reaching their peak and a weakening macroeconomic environment in China.

Adding to Apple’s troubles, recent data from Counterpoint Research revealed that the company lost market share in smartphones in 2023. Furthermore, the broader technology sector has faced difficulties with investors reevaluating the likelihood of Federal Reserve rate cuts starting in March.

As a result, Apple’s stock has already experienced a 5.5% decline in 2024. The company’s position as the world’s most valuable company is now being threatened, with Microsoft closing Thursday with a market capitalization of $2.7 trillion, only $100 billion less than Apple. This is the smallest gap between the two tech giants since November 2021.

With Apple underperforming and Microsoft remaining relatively stable ahead of Friday’s market opening, it is expected that the gap between the two will narrow even further.

In summary, Apple faces multiple challenges in the early stages of 2024, including downgrades from analysts, a decrease in market share, and increased competition from Microsoft. These factors contribute to Apple’s declining stock performance and bring into question its status as the world’s most valuable company.