Their concern is that if the share price falls below this level permanently, it could lead to a downgrade. Investors are also concerned about the state of the Chinese economy and the spread of a pandemic there, which, along with the planned costly relocation of production, is a near-term risk factor for shareholders. In addition, there are concerns about demand for Apple's relatively expensive products at a time of higher interest rates, which, along with the prospect of recession and inflation, make debt financing difficult.

Analysts at JP Morgan said they lowered their expectations for Apple's results in the final quarter of 2022 and the first quarter of 2023 due to recurring supply chain issues and complications at the "iPhone city" factory in Zhengzhou. Although the extension of delivery times for the new iPhone 14 Pro/Pro Max models have slowed (it started to decline in recent weeks), it is still higher compared to the pre-pandemic period. JP Morgan still sees the supply problem persisting from the beginning of the year and it may affect the typical seasonal surge in iPhone sales that investors have seen during the holidays in previous years.

Apple shares are losing value this year, even though they are considered a "safe investment". In 2022, the company managed to outperform the NASDAQ average, losing 28% compared to the 34% decline in the index.*

Apple Inc. stock performance over 5 years. Source: tradingview.com

On the fundamental side, Apple stock is trading at a relatively high price-to-earnings ratio, which means investors expect high growth going forward. But analysts note that the company's growth prospects have deteriorated in recent months, which reflects unfavourably on Apple's future earnings estimates.[1]

* Past performance is no guarantee of future results.

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.