Apple Faces Worst Week Since 2020: Tariffs, AI Delays Spark $776B Selloff
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Apple is on track for its worst week since March 2020, plummeting 12% and wiping out a staggering $776 billion in market capitalisation.
The stock is now 20% below its December peak, officially entering bear market territory.
This sharp decline has left investors questioning Apple’s growth prospects and whether buyers will step in to stabilise the stock.
Several factors are driving the selloff.
President Trump’s escalating trade policies, including a 20% tariff on Chinese imports, have hit Apple hard.
The company relies heavily on China for both manufacturing and sales, with the region accounting for 17% of its fiscal 2024 revenue.
Analysts estimate that sustained tariffs could dent Apple’s operating margin by 100-150 basis points and reduce sales growth by 1-2%.
Apple’s struggles with artificial intelligence have further eroded confidence.
The indefinite delay of its AI-enhanced Siri upgrade, initially slated for 2025, has dampened hopes for a robust iPhone upgrade cycle. This comes as competitors like Google and Microsoft continue to advance in AI integration.
Despite its recent decline, Apple still trades at 28 times estimated earnings, a premium to its 10-year average and higher than most of its ‘Magnificent Seven’ peers.
With revenue growth projected at just 4.7% for fiscal 2025, well below the tech sector’s 11.8%, many argue the stock remains overvalued.
Apple’s struggles are emblematic of wider challenges in the tech sector.
The Nasdaq 100 is down 7% year-to-date, with Apple accounting for nearly 20% of that decline.
The stock’s underperformance has also dragged down the broader market, contributing to a $4 trillion loss in US equity market value since February.
While Apple’s strong balance sheet and cash reserves provide a safety net, the lack of near-term catalysts—combined with macroeconomic headwinds—suggests the stock could remain under pressure.
Analysts are divided, with some seeing this as a buying opportunity and others warning of further downside.
Key questions for investors include whether Apple will secure tariff exemptions, as it did during Trump’s first term, whether the company can reignite growth through AI or other innovations, and if the current valuation is justified or if there’s more room to fall.
What’s your take—will Apple rebound, or is this the start of a longer-term decline? 🤔📉
