Apple is set to miss out on the Nasdaq's relief rally after iPhone 'saturation' fears hammer suppliers
- Apple is missing out on minor relief rally in US futures, while other "FAANG" stocks are rising in premarket trading.
- Apple and its suppliers underperformed the broader plunge in markets in the US and Asia. Some suppliers have slashed their targets, citing weaker conditions.
- The iPhone maker closed down 4.4% Tuesday, hurt in part by an HSBC downgrade that cited "market saturation."
Apple's stock woes look set to continue after the iPhone maker's suppliers tumbled on fears about "market saturation" and future demand.The Cupertino, California-based company's shares were down slightly in premarket after falling 4.4% on Tuesday - underperforming a particularly brutal 3.8% drop in the Nasdaq - and is also down in premarket New York trading. Apple is missing out on a minor relief rally amongst other so-called FAANG (Facebook, Apple, Amazon, Netflix, and Google) stocks. Advertisement
Apple stock was hurt in part on Tuesday by a downgrade by HSBC, after it cited an overwhelming dependence on a single product.
"What has made the success of Apple, a concentrated portfolio of highly desirable (and pricey) products, is now facing the reality of market saturation," said HSBC.In Asia, shares of its suppliers fell:
- Pegatron, in Taiwan, fell 1.7%
- Chinese acoustics technology supplier AAC Technologies lost 3.7%
- Taiwan's Flexium Interconnect was down 3.9%
- Taiwan's Largan Precision declined 3.7%
In the US, Lumentum Holdings, an optical products manufacturer, fell 5.5% after it cut its outlook last month.Cirrus Logic closed down 1.9% down - having fallen as much as 5.8% days after it cut its December revenue outlook due to recent weakness in the smartphone market. Apple accounts for about 82% of Cirrus' sales. Read More: We're in the darkest hour of Apple's 'white-knuckle period,' and some investors are loving itAdvertisement
Similarly, Qorvo, a North Carolina semiconductor company, dropped 5.3% on concerns about Apple, which recently lost its status as the world's most valuable business.
Another Apple supplier, Broadcom, which reports earnings on Thursday, fell 4.1%. The company, which designs semiconductors, is believed to make around $10 on each iPhone sold, according to JPMorgan, cited by CNBC.Other manufacturers, such as Austria's AMS, which develops facial recognition software, cut its revenue forecast last month as iPhone sales diminished. Advertisement
- Chhattisgarh records 2,551 new COVID-19 cases, 29 deaths
- Ahmedabad reports 193 new COVID-19 cases, 256 recoveries
- Mahatma Gandhi Jayanti - Interesting facts about the 'father of the nation'
- 1,108 COVID-19 cases in Nashik, tally reaches 76,984
- Surat district records 288 COVID-19 cases, 299 recoveries