Apple Inc. is grappling with a challenging start to the year, facing a potential threat to its longstanding position as the world’s most valuable stock by market value. Reacting to growing pressures on the tech giant, investors have witnessed a decline in its shares by 0.4% on Friday, closing at approximately $181. This marks the fifth consecutive day of negative performance, constituting Apple’s longest losing streak since October.
The downturn gained momentum after reports surfaced that the Justice Department is nearing the filing of an antitrust case against Apple, as disclosed by The New York Times. This potential legal challenge adds to the array of issues the company is confronting, ranging from slowing iPhone sales to patent disputes related to its Watch. Analysts, such as Bloomberg Intelligence’s Anurag Rana, speculate that an antitrust suit could target Apple’s business model, which hinges on tightly integrating its devices and services.
Since July 2022, Apple has held the title of the most valuable publicly-listed company. However, the company has witnessed a loss of approximately $177 billion in market value since the beginning of the year, marking the most significant market value decline at the start of any year on record.
Gap between Apple and Microsoft is less than $100 billion
Earlier in the week, Apple faced setbacks with two ratings downgrades, with analysts attributing the decline to a weak macro environment in China impacting iPhone demand. This has narrowed the gap between Apple and its tech counterpart, Microsoft Corp., to less than $100 billion.
Gene Munster, managing partner of Deepwater Asset Management, noted the rarity of two downgrades before an earnings report and highlighted investor behavior, stating, “Everybody’s selling their winners and buying losers.” Brian Mulberry, client portfolio manager at Zacks Investment Management, echoed this sentiment, indicating a significant portfolio rebalance underway at the start of the year.
As a result of these challenges, Apple’s market value has decreased to about $2.8 trillion, nearing Microsoft’s $2.7 trillion. Microsoft, buoyed by the artificial intelligence trend, experienced a marginal decline in its shares on Friday, closing at around $368. The company’s strategic investments, including a substantial stake in OpenAI, contribute to its resilience amid the evolving market dynamics.