Apple, Amazon losses top US$160B after results
BNN Bloomberg
Apple Inc. and Amazon.com Inc. shed more than US$160 billion in combined market value after the technology giants served notice of a difficult holiday season and reported disappointing earnings.
Apple Inc. and Amazon.com Inc. shed more than US$160 billion in combined market value after the technology giants served notice of a difficult holiday season and reported disappointing earnings.
Apple fell 3.5 per cent, erasing about US$106 billion in value, after Chief Executive Officer Tim Cook said supply constraints were affecting most of its products. Meanwhile, Amazon dropped 3.4 per cent after warning that high costs could wipe out any profit in its most-important quarter of the year.
Amazon’s slide erased roughly US$57 billion in value, while Apple’s decline amounted to a loss of about US$106 billion in market valuation. That slump was enough for Microsoft to reclaim the position of the world’s largest listed company by market capitalization.
The debate on whether or not to buy tech stocks following their record run during the pandemic began before the ongoing earnings season, as rising bond yields put the spotlight on the sector’s frothy valuations. A number of hedge funds have turned negative on the sector, which is seeing the biggest increase in short selling among major industries this year, according to Morgan Stanley.
Still, most analysts backed their buy calls on the stocks, saying the issues are transitory. “Even Goliath feels the pain,” Evercore ISI’s Amit Daryanani said of Apple’s warning on chip shortages, while maintaining his outperform rating.
The news from the technology heavyweights overshadowed what had been a strong earnings period for the sector. Earlier this week, Alphabet Inc. and Microsoft Corp. both rose more than 4 per cent after results beat expectations.
