(Bloomberg) — Apple Inc. just had its worst start to the year by far as investors responded to mounting pressure on the company, threatening its longstanding status as the world's most valuable stock by market value.
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Shares of the tech giant fell 0.4% on Friday to close at about $181 after The New York Times reported that the Justice Department is close to filing an antitrust case against the company. The decline marked Apple's fifth consecutive negative day, its longest losing streak since October.
The potential antitrust case against Apple “would add to the plethora of problems facing the company, from slower iPhone sales to Watch patent issues,” Anurag Rana, an analyst at Bloomberg Intelligence, wrote in a note. “The lawsuit could attack Apple’s business model of tightly integrating its devices and services.”
The Cupertino, California-based company has been the most valuable publicly traded company since July 2022, but has lost about $177 billion in market value so far this year, according to data compiled by Bloomberg. While the stock suffered larger percentage declines in the first week of January, the losses represent the largest early-year market value loss on record.
The downturn began earlier this week after the tech giant was hit by two ratings downgrades, with analysts pointing to a weak macroeconomic environment in China that pressured demand for iPhones. That has shrunk to less than $100 billion its lead over tech giant Microsoft Corp., whose shares suffered a less pronounced decline earlier in the year.
“Investors are realizing how rare it is for two people to be negative,” said Gene Munster, managing partner of Deepwater Asset Management. “I've been following this company for a long time and have never seen two downgrades before an earnings report.”
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Apple is also likely to come under pressure as investors switch portfolios at the start of the year.
“Everyone is selling their winners and buying losers,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “A major realignment is taking place.”
The losses have pushed Apple's market value down to around $2.8 trillion, bringing it closer to Microsoft's. Shares of Microsoft fell less than 0.1% on Friday, closing at about $368.
The Windows software maker has benefited from artificial intelligence trading that has captivated Wall Street over the past year. The company is OpenAI's largest shareholder and has invested around $13 billion in ChatGPT's parent company.
– With assistance from Matt Turner.
(Updates stock moves at market close and adds quote in third paragraph.)
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