Apple lose $40bn as "peak iPhone" fear infects investors

Apple is one of the worst hit of a number of tech giants, including Amazon, Alphabet and Facebook, whose stock value plummeted on November 12 after a rough October


After an already-rough month Apple's shares sank by 5% on November 12, losing a market value of $40bn. This followed a profit warning from a number of the company's suppliers and the overarching concern that demand for iPhones is slowing down. The shares closed at around $194, more than 15% below their peak in October.

Apple's plunging value is just the tip of the iceberg, as the loss of value of the once trillion-dollar company was simply one of a number of tech giants which also saw significant value losses yesterday. While the iPhone maker was one of the worst hit, the Wall Street technology sell-off also saw Amazon shares plummet by more than 4%, Alphabet drop 2.5% in value and Facebook lose 2.3%. Overall, the S&P 500 closed 2% lower and the Nasdaq dropped by more than 2.75%.

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"This is the kind of market where once you have a few large moves everything tends to follow," explained Max Gokhman, head of asset allocation for Pacific Life Fund Investors. "There is a lot of sentiment-driven investing where we are still trying to price in a lot of events that are hard to predict – the G12 meeting, whether Brexit occurs on schedule and what the Federal Reserve does in December – in makes investors a bit more jumpy going into the tail-end of the year," he added.

In October, Wall Street suffered its worst monthly rut in seven years, however, early November saw tech stocks begin to rise in value. The latest crash shows that the "market curse", which has seen a number of tech giants lose significant value in recent months following a promising start to the year, has continued.

Apple lost the trillion-dollar crown it earned in August at the beginning of the month when it delivered a disappointing outlook for 4Q18. This outlook was particularly ominous as the holiday season is typically the most financially prosperous. This was coupled with the concern that the market has reached "peak iPhone" following Huawei overtaking it as the second largest smartphone supplier globally earlier this year.

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