TOPLINE Due to news of reduced iPhone 14 production, Apple shares fell on Wednesday amid a rise in the broader market, losing roughly $50 billion in market capitalization. However, analysts claim the decline is an uncalled-for knee-jerk reaction and maintain a positive outlook for the current iPhone cycle.
In early trading on Wednesday, Apple stock dropped as much as 4.4% to $145.03, a two-month low, after Bloomberg reported that the firm had abandoned plans to increase iPhone 14 manufacturing by as many as six million devices in the second half of 2022 owing to weak demand.
According to estimates from July, according to Bloomberg, Apple still expects to meet its target of 90 million iPhone 14 units produced in the second half of the year. Additionally, Morgan Stanley and Citi analysts each stated in notes published on Wednesday that their estimates for iPhone demand remained unchanged.
The demand for the iPhone 14 is “more bark than bite,” according to Morgan Stanley analysts.
According to Bloomberg, demand for the more expensive iPhone 14 Pro models is greater than that for the entry-level models. Wedbush analyst Dan Ives stated that “the iPhone 14 Pro demand is robust and this will enable Apple to power through near-term macro headwinds much better than anticipated by the Street.”
Even though Apple was the only company on the Dow Jones Industrial Average to lose value for the day, the stock rallied in subsequent trading to close down only 1.3% lower.
