Apple’s stock market value drops below $2 trillion

The sale came a year after the iPhone maker became the first company to reach the $3 trillion mark in market cap.

Shares of Apple fell 3.7 percent to $125.07 after Exane BNP Paribas analyst Jerome Ramel downgraded the company to “neutral” from “outperform,” lowering its price target from $140 to $180, according to Refinitiv Eikon .

Investor concerns that a slowing global economy and high inflation could hurt demand for Apple devices also intensified. Nikkei reported, citing unnamed suppliers, that Apple has directed suppliers to produce fewer parts for its earbuds, watches and laptops.

The drop in Apple’s stock price brought its market cap to $1.99 trillion.

Ramel lowered its iPhone shipment targets for fiscal 2023 from 245 million to 224 million units, due to supply chain issues from manufacturer Foxconn and consumers cutting back on high-end phones.

At Apple’s current share price, the company’s value is just above Microsoft Corp, valued at about $1.8 trillion.

With investors worried about consumer demand, analysts expect the Cupertino, California-based company to report a 1 percent drop in December quarterly sales in the coming weeks, according to Refinitiv. That would be Apple’s first quarterly revenue decline since the March quarter of 2019.

“They (Apple) tend to gravitate toward the high-end consumer device customer, but even that demographic can be impacted by the high price of everything,” said Bokeh Capital Partners’ Kim Forrest.

Last year’s steep sell-off on Wall Street punished tech-related heavyweights as investors worried about rising interest rates and dumped stocks with high valuations.

The combined market capitalization of Apple, Microsoft, Amazon.com Inc, Alphabet Inc and Meta Platforms now accounts for about 18 percent of the S&P 500, up from a whopping 24 percent in 2020.

Even after last year’s 27 percent decline, Apple has delivered excellent returns for long-term shareholders. Investors who bought and owned Apple stock when co-founder Steve Jobs launched the iPhone in 2007 posted a gain of more than 4,000 percent, excluding dividends, compared to a 180 percent gain in the S&P 500 over the same period.