Barron’s: Why Apple is making investors skittish

From Eric Savitz’ “Apple Stock Lags Behind as Doubts Mount on iPhone Sales” posted mid-day Wednesday by Barron’s:

Apple shares have been left out from Wednesday’s modest rally in tech shares. They are one of a handful of large-cap tech stocks trading in the red. Near midday, the stock was down 0.4%, to $139.82, while the Nasdaq CompositeCOMP +1.88% had risen 0.5%. The stock is off about 21% so far this year.

One reason for Wednesday’s weak performance is a Nikkei Asia story that says Apple’s development schedule for iPhone 14, expected to arrive this fall, has been hampered by lockdowns in Shanghai in connection with China’s zero-Covid policy. In reporting its March quarter results, Apple warned that revenue in the June quarter could take a hit of between $4 billion and $8 billion because of Shanghai-related problems with supplies…

Meanwhile, Loop Capital analyst Ananda Baruah thinks Apple could scale back its production plans for iPhones this weekend. In a research note, he said that Wall Street estimates for iPhone sales in the June quarter could be too high by between 4 million and 6 million units and that he thinks estimates of the number sold in the March quarter overshot the real figure by 5 million.

Apple doesn’t disclose unit sales of iPhones, so there isn’t any way to know the actual number.

My take: Eric’s piece was overtaken by events. Apple closed in the green.

 

3 Comments

  1. Daniel Epstein said:
    While there are plenty of reasons to worry that the Macro environment around the world and China specifically is causing Apple supply chain issues these wall of worry creators are confusing rumors (where there are a lot) and facts (of which there are few). Using metrics which can’t be measured or checked so they can create a narrative is the state of media coverage and business analysts these days. From what I can tell the Apple 14 line might not be released at the usual end of September timeframe. Been there and done that. Some people think the demand may not be as robust as the Iphone 13. Might as well sell everything as the possibility of something bad happens exists. Apple is just the type of company with extensive cash reserves and great profitability that long term will be successful. But it won’t be smooth sailing all the time.

    7
    May 25, 2022
  2. We must remember iPhone releases were only delayed by a few weeks during 2020. I realize these are different challenges now but lockdowns were everywhere in 2020. Apple still released iPhone that year and the next. They learned how to produce under difficult conditions, WFA and not being able to go to China as often as before. Suppliers are key but Mr. Cook’s team seems to work several steps ahead of the competition.

    6
    May 25, 2022
  3. Kirk DeBernardi said:
    “Eric’s (desire for clicks) piece was overtaken by events.”

    Or how about, “…overtaken by the savvy investor’s realization of ongoing base fundamentals?

    Click THAT.

    0
    May 25, 2022

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