Investor worries sent markets plummeting this past week, taking several of Wall Street’s most beloved equities with them and sending Apple stock into “bear market territory” for the first time in several years.
Experts are divided over whether the current rout of stocks represents a buying opportunity for well-respected issues or the start of a long-feared market correction. As CNN Money points out, even household-name stocks beloved among everyday, average investors have been affected by the sell-off, including both Apple and Disney. Apple’s stock is down nearly 9 percent over the course of the last week, while Disney fell roughly 8 percent.
— MarketWatch (@MarketWatch) August 22, 2015
As USA Today points out, Apple’s stock is unique in that it largely characterizes the bull market that has existed for the last few years. Apple is a top holding among individual investors, and its record amounts of cash and massive profit margins made it possible for the company to demand a premium for both its products and equity.
The dramatic fall of Apple’s stock, however, has resulted in a notable turnaround from the all-time-high it hit earlier this year, trading at $134.50 a share. Since then, the stock has declined 20.6 percent, dramatically outpacing the 6 percent decline of the broader market. Its downturn has eradicated roughly $158 billion in shareholder wealth, wiping out the entirety of Apple’s 2015 gains. Apple stock is now down 3.2 percent on the year, when it once been up as high as 22 percent.
— Digital Trends (@DigitalTrends) August 22, 2015
Investors are quick to note that Apple has seen dramatic selloffs in the past, particularly between September 2012 through July 2013, when the stock lost 43 percent of its value. In addition, the company faces certain headwinds in the smartphone market, where Verizon and Sprint have recently announced plan changes that will bring an end to smartphone subsidies. On top of that, the market downturn in China (which is responsible for 30 percent of the company’s overall sales) has struck one of Apple’s largest growth markets hard, adding to investor worries.
— CNNMoney (@CNNMoney) August 22, 2015
Despite the dramatic downturn in its price, analysts remain bullish on Apple stock. The company remains the most valuable in the United States, worth $618 billion and boasts an average 18-month price target of $147.98. With an array of analysts still rating the issue as “outperform,” investors will no doubt watch closely to see if the coming weeks represent a unique buying opportunity for Apple stock.
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