The early days of 2024 have proven to be a tumultuous journey for the tech titan Apple, as its stocks have taken a hit, sparking concerns of a potential $90 billion blow to its market cap. The drop in stock value has been linked to worries about lacklustre demand for Apple’s products, particularly the iPhone, in the face of competition from companies like Huawei.

Analysts at Barclays have downgraded Apple’s stock, leading to a 3 per cent dip in share value, marking a seven-week low for the company. Currently trading at $187.24 on Nasdaq, the stock has plummeted by 2.75%, with anxieties lingering about weak demand for its devices throughout the year.

Barclays’ analyst Tim Long has expressed apprehensions about the underwhelming performance of the iPhone 15 and has foreseen a comparable fate for the iPhone 16. This sentiment has contributed to the overall negative outlook on Apple’s stock, with concerns also extending to the company’s services business, particularly in the US.

The potential repercussions of this stock slump are significant, with the looming threat of wiping out $90 billion from Apple’s market cap, which currently stands at $2.91 trillion. This would undoubtedly deliver a substantial blow to the tech giant, considering that its stock accounts for 7 per cent of the S&P 500’s weight. Despite a robust performance last year, with a nearly 50 per cent surge in stock value and a record high in December, the current situation is less than sanguine.

Barclays has made the move to downgrade Apple’s stock to ‘underweight’ from ‘neutral’ and has adjusted its 12-month price target to $160. This shift in rating is a notable move, matched in bearishness only by Itau BBA’s “sell” rating back in July 2022. However, the average analyst rating for Apple remains “buy” with a median price target of $200, despite the current challenges the company is grappling with.

The concerns raised by analysts, particularly about the lack of enticing features or upgrades in the impending iPhone 16, have compounded the pessimism surrounding Apple’s stock. This sentiment is mirrored in the company’s current trading position at about 28.7 times its 12-month forward earnings estimates, significantly higher than the S&P 500’s benchmark of 19.8.

The future looms uncertain for Apple, with worries about tepid demand, especially in the Chinese market, where local competitors like Huawei have gained traction. The ramifications of this stock downturn on the company’s overall performance for the year are yet to unfold, but it presents a formidable challenge for the tech giant as it navigates these choppy waters in the stock market.