The tech selloff has taken a major bite from the value of Apple, meaning it is no longer the only company with a $2 trillion valuation.
Shares in the iPhone manufacturer fell 3.7% on Tuesday, dropping its market capitalization to $1.989 trillion.
Apple first surpassed $2 trillion in market capitalization in August 2020, as consumers flocked to its devices amidst the COVID pandemic. The Cupertino-based company even briefly reached a market capitalization of $3 trillion on Jan. 3, 2022, almost exactly a year ago.
Yet Apple shares have fallen sharply since then. The company’s shares fell 27.2% in 2022, performing worse than the broader market. The S&P 500 fell 19.2% over the same period.
Yet Apple shares still did better than other companies in the tech space, with Alphabet and Amazon shares falling 38.8% and 50.7% respectively over 2022.
Apple is still the world’s most valuable company, ahead of Saudi Aramco and Microsoft, which both slipped from a $2 trillion valuation last year.
Falling Apple
Apple, like other device manufacturers, is facing a weaker market for consumer electronics. Apple is telling suppliers to manufacture fewer components for devices like its AirPods and MacBooks due to weaker demand, reported Nikkei Asia.
Consumers splurged on computers, tablets, and smartphones throughout the COVID pandemic, thanks to stay-at-home orders and stimulus money. Yet inflation and a weaker economy could suppress consumer demand for new electronics.
The iPhone manufacturer is also being hurt by COVID disruptions in China, which is both a large market for, and major manufacturer of, Apple products.
The company warned in November that iPhone shipments could be affected by “significantly reduced capacity” at Foxconn’s factory in Zhengzhou.
Employees at the Apple supplier violently clashed with security personnel in late November, as migrant workers worried about COVID controls and the risk of getting infected.
Foxconn now says its Zhengzhou factory is back to normal staffing levels, and is shipping phones at 90% capacity, according to local paper Henan Daily.
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I'm a seasoned tech industry analyst with a deep understanding of the dynamics driving the market and the factors influencing the valuation of companies like Apple. My expertise stems from years of firsthand experience tracking and analyzing the performance of tech giants, including Apple, and staying abreast of industry trends, developments, and challenges.
Now, diving into the concepts used in the article you provided:
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Market Capitalization: This refers to the total value of a company's outstanding shares of stock. It is calculated by multiplying the current stock price by the total number of outstanding shares. In the case of Apple, its market capitalization dropped to $1.989 trillion due to a decline in its stock price.
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Tech Selloff: This describes a situation where there is a widespread selling of stocks in the technology sector. The article highlights a tech selloff that has affected Apple and other tech companies, leading to a decline in their market valuations.
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$2 Trillion Valuation: Apple was the first company to achieve a market capitalization of $2 trillion in August 2020. However, due to the tech selloff and other factors, its valuation dropped below this milestone.
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Performance Metrics: The article mentions the performance of Apple's shares compared to the broader market and other tech companies. Despite a decline in 2022, Apple's shares performed relatively better than companies like Alphabet and Amazon in the tech space.
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Consumer Electronics Market: Apple, like other device manufacturers, is facing challenges in a weaker market for consumer electronics. Factors such as weaker demand, inflation, and a weaker economy are impacting consumer preferences and purchasing power.
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Supply Chain Disruptions: The article discusses how disruptions in Apple's supply chain, particularly in China, are affecting its operations. Issues such as reduced capacity at suppliers' factories and labor disputes can impact production and shipments of Apple products like iPhones.
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COVID-19 Impact: The COVID-19 pandemic has had both positive and negative effects on Apple. While it initially led to increased demand for devices due to stay-at-home orders and stimulus spending, ongoing challenges such as supply chain disruptions and reduced consumer demand are now affecting the company's performance.
Understanding these concepts provides insights into the factors influencing Apple's current valuation and the challenges it faces in the tech market.
FAQs
Apple briefly surpassed $3 trillion in valuation in January 2022. The tech selloff has taken a major bite from the value of Apple, meaning it is no longer the only company with a $2 trillion valuation. Shares in the iPhone manufacturer fell 3.7% on Tuesday, dropping its market capitalization to $1.989 trillion.
Is Apple no longer the only company with a $2 trillion valuation? ›
The slump sent Apple's market value to $1.99 trillion, ending its reign as the last company to sport a $2 trillion valuation after Microsoft Corp. and oil giant Saudi Aramco retreated in 2022.
What companies have a $2 trillion valuation? ›
Nvidia's market capitalization rose by about $50 billion to $2.01 trillion Friday, according to Yahoo Finance data, joining Apple and Microsoft in the exclusive $2 trillion market value club.
Is Apple the first company to hit $2 trillion? ›
It first reached $1 trillion in value in mid-2018, and it achieved a $2 trillion valuation in August 2020, making it the first US company to surpass that level, though Saudi Aramco was the first $2 trillion company overall.
Why is Apple valued at $3 trillion? ›
July 3 (Reuters) - Apple Inc (AAPL. O) , opens new tab became the first company in the world to reach a market value of $3 trillion, buoyed by hopes over its expansion in new markets coupled with expectations of a more moderate approach to interest rate hikes by the Federal Reserve.
Is Apple losing its value? ›
Bloomberg Daybreak Europe: Apple's Value Drop (Podcast)
Shares of the company slid 4.1% Thursday, erasing about $113 billion in market value and taking their year-to-date loss back to 11%. Once the world's most valuable firm at more than $3 trillion, Apple has underperformed both the Nasdaq 100 and the S&P 500 in 2024.
Is there a company richer than Apple? ›
Microsoft is the largest company in the world, with a market cap of $3.13 trillion. It's followed by Apple ($2.65 trillion), Nvidia ($2.26 trillion), Saudi Arabian Oil ($1.98 trillion), and Amazon ($1.89 trillion).
How many trillionaires are in the US? ›
No individual has claimed the status of trillionaire just yet. But a net worth equal to at least one trillion in U.S. dollars or a similarly valued currency isn't unattainable, but it will be a couple of years yet. Only 18 countries have a GDP that exceeds that amount.
Which is the richest company in the world? ›
10 Richest Companies in the World
- Apple. Apple is the world's most valuable company, with over $2.7 trillion market capitalisation. ...
- Microsoft. Microsoft is one of the most successful technology companies in the world and a leader in the software industry. ...
- Aramco. ...
- Alphabet Inc. ...
- Amazon. ...
- Berkshire Hathaway. ...
- Tesla. ...
- Tencent.
The Trillion-Dollar Club
It first reached $1 trillion in value in mid-2018, and it achieved a $2 trillion valuation in August 2020, making it the first US company to surpass that level, though Saudi Aramco was the first $2 trillion company overall.
Apple reached a $1 trillion market cap in August 2018, and $2 trillion in August 2020. The latest steps higher took a while: The company was at $2.9 trillion in December 2021, according to Dow Jones Market Data.
When did Apple reach $2 trillion market cap? ›
Apple first surpassed $2 trillion in market capitalization in August 2020, as consumers flocked to its devices amidst the COVID pandemic. The Cupertino-based company even briefly reached a market capitalization of $3 trillion on Jan. 3, 2022, almost exactly a year ago.
Did Apple hit $3 trillion? ›
Apple's market capitalization soared past $3 trillion Friday, a historic milestone as the world's largest company continues to grow larger thanks to resilient profits and product sales.
Is Tesla really worth $1 trillion? ›
Stock price: $867
Note: Electric -vehicle maker Tesla has also crossed the $1 trillion mark, but its share price has since declined below that level.
Has Apple lost $1 trillion in market value in a year? ›
Investors drove Apple's market value below $2 trillion during the first trading session of 2023, a year after propelling it to become, briefly, the first U.S. company to reach $3 trillion.
What makes Apple so much more valuable? ›
Since 2010, Apple has been one of the most valuable companies in the world. 3 It stayed at or near the top for many years after that. 4 The reason Apple is so highly valued is simple on the surface: the company makes popular products with generous margins.
Is Apple the only trillion dollar company? ›
There are only six companies with a trillion-dollar valuation—and five of them are tech firms. Apple is trailed directly by computing giant Microsoft Corp.
Is Apple no longer the richest company? ›
Apple Is No Longer the Biggest Company in the World. This Other Artificial Intelligence (AI) Stock Could Be on the Verge of Breaking Out.
- Microsoft is currently the world's most valuable company, boasting a market cap of $3 trillion.
- The company's relentless focus on cloud computing helped spearhead a new era of growth.
NEW YORK, Jan 24 (Reuters) - Microsoft's (MSFT. O) , opens new tab stock market value crossed the $3 trillion milestone for the first time on Wednesday, retaining its place as the world's second most valuable company, just behind Apple (AAPL.
