Apple Inc. has encountered a turbulent beginning to 2024, with its stock experiencing a consistent downward trajectory over the first two months of the year. Currently, the tech giant’s stock has plummeted by nearly 10% since the onset of 2024, trading at under $170 per share. This decline contrasts sharply with the flourishing stock performance of other tech companies in the wake of the AI boom, notably Microsoft and Nvidia.
Despite its formidable standing as the world’s second-most valuable company, one analyst cautions that Apple may be in for even rougher waters ahead.
According to Mizuho analyst Jordan Klein, Apple’s stock could face a severe downturn if its largest non-ETF shareholder, Warren Buffett’s Berkshire Hathaway, further reduces its stake in the company. Klein issued this warning to investors in a recent note, suggesting that Berkshire Hathaway’s actions could have dire consequences for Apple’s stock performance.
Berkshire Hathaway, renowned for its ownership of GEICO and Dairy Queen, disclosed a 1% reduction in its Apple stake during the last quarter of 2023, as indicated in SEC filings this year.
Klein speculates that Buffett may already be in the process of shedding more Apple shares, given the apparent challenges confronting one of his prominent holdings. If proven accurate, Klein argues that the revelation of Buffett’s divestment strategy could trigger a significant sell-off among retail investors, exacerbating the stock’s decline.
“He knows when that 13F comes out showing he started to sell, that Apple shares will get killed as retail investors rush for the exit,” Klein stated in his note.
Apple’s struggles in 2024 have been underscored by several notable setbacks. In January, the company relinquished its title as the world’s most valuable company to Microsoft, whose market capitalization now stands at $3 trillion, eclipsing Apple’s $2.6 trillion valuation.
Further compounding Apple’s woes, several brokerages downgraded its stock to a “sell” rating in January, citing concerns about weakening iPhone demand, particularly in China. Apple’s latest quarterly earnings report revealed a 13% year-over-year decline in net sales in China for the three months ending Dec. 30. Recent data indicates a continuation of this trend into 2024, with analysts from Counterpoint Research reporting a 24% year-over-year drop in iPhone sales in China during the first six weeks of the year.
Adding to the company’s challenges, Goldman Sachs removed Apple from its “Conviction List,” a selection of top stocks, last week.
Despite these setbacks, Apple’s stock saw relatively stable performance in Wednesday afternoon trading.
