CNA – Apple shares fell four per cent in premarket trading yesterday and piled pressure on other growth stocks following a report that the tech giant was dropping its plans to boost production of the latest model of its flagship iPhone.
Bloomberg earlier reported that Apple had told its suppliers to curtail efforts to increase the assembly of its iPhone 14 line-up by as many as six million units in the second half of the year on disappointing demand.
Shares of the world’s most valuable public company fell to USD145.89 and were on track to open at a two-month low.
Other growth stocks including Microsoft, Amazon, Google-parent Alphabet and Tesla fell between 1.5 per cent and three per cent on the news.
“Weaker consumer demand is to be expected when utility bills are going up, interest rates are going up, mortgage costs are going higher… discretionary spending is going to be curtailed by that,” said Chief Investment Officer at Plurimi Wealth in London Patrick Armstrong.
“Apple is not immune to that and it’s probably symptomatic of what’s happening across many different companies right now.”
The rate-sensitive growth stocks have taken a beating this year on the United States (US) Federal Reserve’s rapid pace of interest rate hikes.
The S&P 500 growth index has shed 29 per cent this year, compared with a 17 per cent slide in its value counterpart.
Shares of chipmakers fell on the news, with Apple suppliers Broadcom, Qualcomm and Taiwan Semiconductor, Skyworks Solutions and ON Semiconductor down in the range of 1.2 per cent and 2.8 per cent.
Apple’s suppliers in Europe – STMicroelectronics, BE Semiconductor, Nordic Semiconductor, ASM International, Infineon, and ASML – fell between 1.6 per cent and 4.7 per cent.