Apple and its major Asian suppliers have seen their shares drop after Barclays downgraded the US tech giant’s stock due to slowing demand for its flagship iPhone.
On Tuesday, Apple’s stock fell 3.58% to a seven-week low as Barclays demoted the company’s stock to underweight and lowered the stock’s price target to $160 from $161. The decline erased around $100 billion from Apple’s market capitalization.
Barclays analysts cited growing headwinds for the Cupertino-based company’s future device sales, especially for the iPhone. The outlook poses a significant concern for Asian suppliers as most of Apple’s device supply chain is significantly concentrated in Asia.
Shares of Apple’s memory chips and display supplier, South Korea’s SK Hynix, and Samsung Electronics dipped by 3.93% and 3.14%, respectively. The iPhone maker’s battery supplier, Samsung SDI, sank by 4.07%.
Moreover, LG Display and LG Chem, other suppliers of Apple, eased by 0.60% and 2.14%, respectively. Pasco International also declined by 1.18%.
Apple’s primary semiconductor supplier, Hon Hai Precision, climbed by 0.48%, and Taiwan Semiconductor stabilized in Taiwan.
In China, AAC Technology, the company’s acoustic components provider, dipped by 2.66%, while BYD steadied in Hong Kong.
Barclays expects the successor of the iPhone 15 may also face weak sales due to a lack of innovative features that could drive sales significantly.
Meanwhile, semiconductor giant Nvidia declined to impact major US indices after the Dutch government ordered ASML Holdings to cease certain shipments to China.
Apple’s China Sales Dip for Three Quarters in 2023
Apple saw three-quarters of sales decline in China in 2023, partly due to a ban preventing government employees from using its products.
The company is also experiencing stronger competition in the country from Huawei’s new offerings, including the release of its latest flagship phone in October, which is designed to compete directly with the iPhone.
Barclays anticipates diminished sales for Apple in developed markets, while the higher sales from emerging markets may not be able to compensate for the fall.
Furthermore, the company’s services division is projected to face sluggish revenue growth in 2025.
