Apple Inc. (AAPL) shares took a tumble in pre-market trading on Friday, dropping by 2.03% following the company’s announcement of a low-to-mid-single-digit sales growth forecast for the current quarter. This news comes on the heels of Apple’s earnings report for the September quarter, which slightly beat analysts’ expectations, driven largely by a rebound in iPhone sales.
However, the market’s focus has shifted to Apple’s outlook for the December quarter, which appears less optimistic. Investor concerns were amplified by the company’s guidance, perceived as weak, especially in China, a key market for Apple. The company is facing intense competition from local firms like Huawei, resulting in a decline in revenue from the region.
While Apple CEO Tim Cook highlighted positive developments in the company’s performance in China during the fourth-quarter earnings call, he refrained from commenting on the potential impact of economic stimulus. Cook did note a stable year-over-year performance in China, partially attributed to improved foreign exchange rates.
Jim Cramer, host of “Mad Money,” expressed his opinion that Apple’s stock shouldn’t have risen as much after the third-quarter earnings, suggesting the market has now adjusted to the company’s lowered financial forecast. Cramer believes this adjustment brings expectations to a more reasonable level.
Despite the forecast cuts, analyst Dan Ives defended the strong launch of the iPhone 16, noting robust performance in Europe for both Apple and Amazon. While the market’s reaction to Apple’s forecast reflects concerns about its future performance, the company remains a major player in the technology sector, and its future success will depend on its ability to navigate the challenges posed by global competition and economic uncertainty.
