Apple Shares fell nearly 10% on Friday after the company issued a weaker-than-expected sales forecast and warned that severe supply chain constraints were limiting production of key products.
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The decline could become Apple’s biggest one-day drop since the market selloff in March 2020. If the losses hold, the company will lose nearly $500 billion in market value. Nvidia would also regain its position as the world’s most valuable company.
Chief Executive Tim Cook described the supply shortages as “very significant.” He said Apple had limited flexibility to secure enough components to meet strong demand for iPhones and Macs.
Moreover, Cook said the artificial intelligence boom has increased competition for advanced chips and memory. As a result, technology companies are competing for limited manufacturing capacity worldwide.
Apple forecast revenue growth of 9% to 11% for the current quarter. However, Wall Street had expected growth of about 12%, disappointing investors despite stronger-than-expected quarterly earnings.
The company’s services business also expanded more slowly than analysts had anticipated. Consequently, investors questioned whether future iPhone sales and digital services could maintain their recent momentum.
Meanwhile, market analysts warned that persistent supply shortages could pressure Apple’s product sales in the coming months. They also noted that higher memory costs and limited processor supplies continue to affect the broader technology industry.
Several brokerages revised their price targets following the earnings report. Although some firms raised their forecasts, others lowered them, reflecting mixed expectations for Apple’s outlook.
Despite Friday’s sharp decline, Apple shares had gained more than 22% this year before the latest selloff. Investors will now closely watch the company’s supply chain and demand trends ahead of its next iPhone launch.
