Apple’s 2024 Slump Puts Most-valuable Stock Title at Risk

Apple Inc. is facing its weakest start to a year since 2019, jeopardizing its longstanding position as the world's most valuable stock by market value. The Cupertino-based company has held the title of the most valuable publicly-listed company since July 2022.

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However, the stock has witnessed a sharp decline this year, prompted by two ratings downgrades. Analysts have pointed to a weak macro environment in China, exerting pressure on iPhone demand. Consequently, Apple's lead over rival technology giant Microsoft Corp., which has experienced a less pronounced decline in its shares this year, has narrowed to less than $100 billion.

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In the current regular trading session, Apple shares are oscillating between gains and losses on Friday. Ending the day on a positive note would break a four-day losing streak. Nonetheless, the company has already seen $164 billion in market value erased this year, making it the most significant market value destruction at the start of any year on record, even though there have been more substantial percentage declines in the first week of January.

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Gene Munster, managing partner of Deepwater Asset Management, commented on the unusual occurrence of two downgrades before an earnings report, stating, "Investors realize how rare it is to have two people go negative. I've been covering this company for a long time, and I've never seen two downgrades before an earnings report."

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Apart from the downgrades, Apple is likely feeling the pressure as investors undertake portfolio rotations at the beginning of the year. Brian Mulberry, client portfolio manager at Zacks Investment Management, noted, "Everybody's selling their winners and buying losers. There's a big rebalance going on."

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As a result of these losses, Apple's market value has dwindled to approximately $2.84 trillion, approaching Microsoft's $2.76 trillion. In contrast, Microsoft's shares have gained as much as 1% on Friday.

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Microsoft, the Windows software maker, has benefited from the artificial intelligence trade that captivated Wall Street over the past year. As OpenAI's largest shareholder, Microsoft has invested around $13 billion in the parent company of ChatGPT, contributing to its positive performance in the market.

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The dynamics between Apple and Microsoft underscore the evolving landscape of technology stocks, with market sentiment influenced by factors ranging from macroeconomic conditions to individual company performance. Investors are closely monitoring these developments as both tech giants navigate challenges and opportunities in the ever-changing market.