“After a drop in big technology stocks Friday caused the Nasdaq composite to post its worst week of the year, the shares came under pressure again on Monday after Apple shares were downgraded,” John Melloy reports for CNBC.
“Mizuho Securities’ Abhey Lamba downgraded the iPhone maker to neutral from buy on Sunday, saying the best-case scenario is priced into the shares. The analyst echoed a common concern by investors taking profits in big technology stocks last week,” Melloy reports. “‘The stock has meaningfully outperformed on a YTD basis and we believe enthusiasm around the upcoming product cycle is fully captured at current levels, with limited upside to estimates from here on out,’ wrote Lamba, who cut his 12-month price target to $150, which is about one dollar above where Apple closed Friday.”
“The Nasdaq 100 index dropped more than 1 percent. Shares of Apple were off by more than 3 percent in early trading Monday. Alphabet, Microsoft, Facebook and Amazon all fell by more than 2 percent,” Melloy reports. “A Friday sell-off pushed the Nasdaq down more than 1.5 percent last week, but the selling was worse among the biggest stocks. Apple, Alphabet, Microsoft, Facebook and Amazon lost nearly $100 billion in market value on Friday on no specific headlines, but rather investors questioning whether valuations for the names were getting ahead of themselves.”
Read more in the full article here.
MacDailyNews Take: This too shall pass.
“The analyst echoed a common concern …”
ok, we get it. Concerns about potential concerns concern analysts, who expect expectations to be lowered below expected expectations. The BS fan is on again.
Stock Market 101: Wall Street doesn’t control, decide or “set” the price of a stock. Nor does it “reflect” the state of the economy, let alone the state of any company represented.
For example, the success of Apple (or lack thereof) has no direct effect on the price of Apple’s stock. Rather, when traders are (in general) more interested in selling it than buying it, the price of a stock declines. The opposite is also true.
If you “Play” the stock market (trade) you quickly discover the only way to make money on a rising stock is to be among the first to buy it (when it is still low). And the only way to avoid losing money on a declining stock is to be among the first to sell it (when it is still high). The net result, folks, is traders don’t watch the company behind the stock. They are watching each other. If a few start selling a stock, the rest rush to sell it, too. If they hear some news (or some analyst’s comments) that they think will cause other traders to react, they will try to be among the first to so react. Thus they become a self-fulfilling prophecy.
Investors, on the other hand, are interested in the company. They buy and hold for the long term. For them, it’s a savings account with (hopefully) a better return. But because of this, Investors don’t influence price changes in any way.
Wall Street is not smart, stupid or clueless. People who cry, “They just don’t understand Apple,” don’t understand the market. It’s a mob-mentality, pure & simple. They don’t care about you, me or Apple. They only care about each other and any “skill” they may have is simply the ability to predict what other traders might do before they do it.
In other words, “traders” are like sheep… If a few suddenly start to run, they all run and in the same direction. Only afterward will analysts attempt to figure out why.
What’s the solution for Apple? Minimize their reliance/exposure to traders. So, you begin share buy-backs and bond issues – with an eye toward reducing your risk (from traders) or perhaps one day eliminating it! (Get out of the stock market and go private. All they’d really need is lots of money to fund themselves! Hmmm.)
I’ll get off my soap-box, now.
Br.DBilly, you actually sounded fairly knowledgeable up until your final statement about Apple taking itself private. I can accept the rest of your oversimplifications given the forum, but please do not propagate this “Apple taking itself private” nonsense. It cannot happen! It takes external funding to take a company private. The internal corporate assets belong to the current shareholders, and buybacks simply concentrate ownership among fewer outstanding shares.
Please study a bit…
Just purchased more shares for long term holdings.
Hedge funds create a new good entry points and portfolio-rotations in tech stocks. Buy buy buy buying on the dip. Thank you!.
Note that the downgrade happened *after* last week’s poor Nasdaq performance. That kind of reactionary feedback is about as useful as a plumber notifying you of a pipe leak after water is already running our of your front door.
Didn’t we read right here on this site that the WWDC was going to start another big share price runup in AAPL?
tech stocks have risen over 30% in ’17…that’s quite a climb. Apple has risen less than some. Who wouldn’t want to put some of that in their wallet? APPL 3% down today–would have preferred 3% up, but, NBD.
When the banks buy the stock price uptrend, but when the banks selling the price would downtrend. Pure and simple.
Which creates a new entry points.
CNBC nailed the analyst for making his downgrade late Sunday night for maximum effect. He seemed like a complete goofball. Sad to see how easy the market is influenced by such junk.
CNBC is Apple number one iHater.
Apple is on track to continue growing its earnings and sales, and its 1.7% dividend yield is also attracting dividend-hungry investors. The long-term payout growth is now at 25%, according to calculations by William O’Neil + Co.
Long AAPL.
Apple going down isn’t the problem, it’s the fact that the big five tech companies when down at exactly the same time with the exact same down graph as if on cue.
Oh, shit. That was fast.