Apple shares tumbled on Thursday, on track to wipe $200 billion off its market value in just two days as China plan Expand the ban on iPhone use to government-backed agencies and state-owned enterprises.
Shares of the Cupertino, California-based company fell 5.1 percent, bringing their two-day losing streak to 6.8 percent. Apple, the largest component of major U.S. stock indexes, added to a broader sell-off sparked by a string of problems in China.
The world’s second-largest economy has been slumping due to a protracted crisis in the housing market, threatening demand for everything from commodities to consumer electronics. The iPhone maker counts China as its largest overseas market and global production base.
To add insult to injury, U.S. Treasury yields have been rising, with bonds selling off amid concerns that the U.S. economy remains resilient and the Federal Reserve will have to step up its fight against inflation.
The news had broad market implications, with investors dumping everything from chips and big tech to U.S.-listed Chinese stocks.
“The Nasdaq is falling as a bad Apple kills a bunch of big tech stocks,” said Edward Moya, senior market analyst at OANDA. “Apple’s growth story is heavily reliant on China, If Beijing steps up its crackdown, it could cause big problems for other big tech companies that rely on China.”
The tech-heavy Nasdaq 100 fell about 1%, while the Philadelphia Semiconductor index, which includes several Apple suppliers, fell 2.5% on Thursday.
interesting timing
Bank of America analyst Wamsi Mohan noted that “the timing of a potential ban is interesting” given Huawei Technologies Co Ltd’s recent launch of 5G-enabled high-end smartphones.
Dismantling of new equipment programme Beijing appears to be making initial strides in circumventing U.S. efforts to contain its rise, with Huawei’s Mate 60 Pro featuring SMIC’s 7-nanometer chip, according to an analysis by TechInsights for Bloomberg News.
If Beijing goes ahead with the ban, the unprecedented blockade could also affect several other U.S. technology companies that rely on sales and production in China. Apple suppliers on all continents traded lower on Thursday as multiple reports confirmed the latest changes in China.
However, bullish analysts such as Wedbush Securities’ Daniel Ives believe that “the impact of the iPhone ban is overstated” as he expects that of the roughly 45 million iPhones sold in the country over the next 12 months, Fewer than 500,000 iPhones were affected.
“Despite the noise, Apple’s share of the Chinese smartphone market has surged,” Ives, who has an Overweight rating on the stock, wrote in a note.
Svlook
