International tech giant Apple seems to be in big trouble as the market cap of its company is falling very quickly. The company is about to see its biggest weekly decline as its iPhone profits are particularly vulnerable to the trade war with China for production and sales.
Note that Apple has lost about $75 billion of market value since last Friday taking it further away from the $1 trillion valuation.
In the ongoing US-China trade war, the US raised tariffs on $200 billion in goods from China nad this has been troubling Apple investors. Not only Apple’s supply chain and production closely linked to China but the country also accounted for nearly 20% of its 2018 revenue, according to Bloomberg. Morgan Stanley on Thursday estimated that in a worst-case trade scenario, Apple could see its earnings drop by nearly a quarter.
Analyst Jun Zhang said that because of the tariff, prices may increase for Apple’s Airpod, charging dock, the Apple Watch and other products. “We do not know yet if the retail price of the iPhone will increase in the US However, we see the tariffs impacting Apple’s MacBook component costs,” Zhang wrote in a research note.
Before this week’s reports, Apple was performing strongly on the stock market. Apple stock is up 36% from a January low, currently, the company has a market cap of a little less than $900 billion just behind Microsoft Amazon on the list of largest US stocks.