The tech sector, which recorded a massive capital gain during the COVID periods of 2020 and 2021, has been on a nosedive since 2022. News of massive layoffs and leading IT businesses downsizing their businesses has become a common affair in the past few months.
However, Tim Cook-led Apple, just like their disruptive products, has managed to defy the trend, as its stock market value ended a trading session above USD 3 trillion for the first time on June 30, 2023, being lifted by sentiments around improving inflation and the bullish predictions of the iPhone maker successfully expanding into new markets.
Shares of the world’s most valuable tech company have reportedly jumped by 2.3% to USD 193.97, giving it a market capitalisation of USD 3.05 trillion.
Apple’s tryst with the USD 3 trillion is not new. On January 3, 2022, the tech sector behemoth’s market value, for the first time, peaked above the coveted milestone, during intraday trading before closing the session just below that mark.
The latest gains in Apple shares, (49% overall till July, 2023), led the comeback of the technology stocks in the share market, as businesses rebounded on bets that the United States Federal Reserve might be slowing its pace of interest rate hikes, along with the latest buzz around artificial intelligence, another talking point of 2023.
The latest inflation index, closely followed by the Federal Reserve, tumbled to its lowest level in June 2023, due to lower petrol prices and slower-rising food costs.
Consumer prices stayed at 3.8% in May 2023, down from a 4.4% year-over-year surge in April.
Talking about Apple, its quarterly report in May 2023 showed a fall in the tech company’s revenue and profits, but the figures managed to beat analysts’ expectations.
Apple, on June 5, launched its showpiece augmented-reality headset called the ‘Vision Pro’. The company’s stocks have climbed about 7% since then, compared with the S&P 500’s overall 4% rise.
Apple’s stock market growth currently outpaces four other US companies, namely Alphabet, Microsoft, Amazon and Nvidia. These businesses have a valuation of over USD 1 trillion.
Challenges Remain For Apple
As per a report from the Financial Times, Apple has been forced to make major cuts to production forecasts for its ‘Vision Pro’.
Chinese contract manufacturer Luxshare, Apple’s only assembler of the augmented-reality headset, is now preparing to make fewer than 400,000 units of Vision Pro in 2024, as per the report.
The iPhone maker has now asked its Chinese suppliers to prepare components for 130,000 to 150,000 units of the device.
As per the FT report, the complexities around the production of the ‘Vision Pro’ have contributed to Apple’s decision to scale down its production targets. Also, plans for a more affordable version of the device have been pushed back.