Apple stock rout shaves nearly $700 billion from market cap since record close
Apple (AAPL) stock has experienced a significant decline of approximately 18% from its peak in December, resulting in a staggering loss of over $700 billion in market capitalization. This downward trend comes as investors closely analyze the company’s artificial intelligence (AI) initiatives and assess the potential impact of macroeconomic challenges.
The tech giant’s shares reached an all-time high of $259 on December 26, following the integration of ChatGPT into iPhones as part of Apple’s latest rollout of AI features. This milestone propelled Apple’s market cap to a record $3.9 trillion. However, in recent weeks, Apple has faced a steep decline, with shares dropping by 11% in just one week, marking the biggest weekly loss since November 2022. As of Tuesday midday, the company’s market cap stands at approximately $3.2 trillion.
The first few months of 2025 have been challenging for Apple as Big Tech stocks have led a broader market downturn, fueled by concerns that the AI boom may not meet expectations. Additionally, Apple has encountered specific setbacks in its AI strategy. The company recently announced a delay in the release of an AI-upgraded version of Siri, citing unforeseen challenges that have pushed back the launch to later this year. This news prompted analysts at Morgan Stanley to revise their price target for Apple stock and lower their iPhone sales forecasts.
According to Erik Woodring, lead analyst at Morgan Stanley, consumer surveys indicate that an upgraded Siri is the top AI feature that potential iPhone upgraders are interested in. The delay in Siri’s release has led to a downward revision in iPhone shipment forecasts for 2025 and 2026. Woodring emphasized the importance of advanced AI features in driving upgrade rates and shipment forecasts, highlighting the need for a compelling AI application to support iPhone growth.
In addition to AI-related challenges, Apple faces external pressures from Trump’s tariffs on China, which could increase the company’s costs by $2 billion over the next year. This additional financial burden further complicates Apple’s path to recovery amidst a turbulent market environment.
In conclusion, Apple’s recent struggles underscore the critical role of AI in driving innovation and growth in the tech industry. As the company navigates through challenges in its AI strategy and external economic factors, investors will closely monitor Apple’s ability to adapt and capitalize on emerging opportunities in the AI landscape.
[Read more: What Trump’s tariffs mean for the economy and your wallet]
