Apple’s stock hits 2024 rock-bottom (and keeps on dropping) as rivals are ahead in the AI race،
2024 has been difficult for many, and Apple has felt it too.
Just this week, Apple's stock price hit its lowest level for 2024, closing at $170.12. At the time of writing, it was trading even lower at $169.12, but there is still time before the bell rings.
There is no shortage of reasons why investors are somewhat pessimistic about Apple's prospects (via 9to5Mac). After a year of negative revenue growth in 2023, Apple executives provided only weak growth guidance during the February earnings call. There is also the Chinese problem with iPhone sales, the $2 billion fine imposed by the EU because of App Store policies… and there is the AI race where Apple is lagging behind.
Big problems in greater China
As we reported, consumers in the world's largest smartphone market (that's just another way of saying China) have spoken out and after the first six weeks of 2024, iPhone sales have plunged by 24% in China over one year. Apple's sales in China missed analysts' estimates by more than $3 billion. The report has spooked investors into believing there will be continued weakness in iPhone sales throughout this year as local smartphone makers like Huawei become increasingly popular again in China.
EU fine also sent stock tumbling
Apple shares fell nearly 3% after news that the EU declared Apple's anti-management policies illegal and imposed a $2 billion fine. “Investors fear that more changes in App Store policy will be driven by regulation and pressure around the world, which would reduce the growth trajectory of Apple's services with lower commissions on in-app purchases,” the story goes.
Overall, Apple stock is down 8.3% year to date, and nearly 13% from all-time highs set late last year.
The race for AI
Other giant companies have been riding the AI wave in recent months: the AI-fueled hype is paying off. Microsoft stock is up 8.5% this year, which pales in comparison to Nvidia stock which has soared 78% in 2024 alone, with a market capitalization close to Apple in size.
In contrast, Apple appears to be somewhat behind the times when it comes to AI, having not announced any major generative AI features so far. However, rumors indicate that this is set to change at WWDC in June, with iOS 18 offering deep AI integration across the system.
2023 was a blessing from above for Nvidia. With brutal gains of 240%, it was the best performing stock in the S&P 500 in 2023. Shares of Arm Holdings (another chip manufacturing company that has recently moved into AI) have also seen an incredible 80% jump in recent weeks – driven by the high demand for AI chips.
It was only recently that Nvidia eclipsed Alphabet (think Google) as the third most valuable American company. Ahead of Nvidia are only Microsoft (currently number one) and silver medalist Apple.
