Apple’s market cap has dropped by $640 billion in the last three sessions.
Apple shares fell another 3.7% Monday as concerns over President Donald Trump’s aggressive tariff policy escalated. This sale has now wiped 19% off the value of the technology giant in just three days.
Apple’s stock price remained high despite the general stabilization of the market.
Analysts say that this company is very vulnerable to tensions in the trade, especially because it relies heavily on Chinese manufacturers.
China now faces 54% of tariffs. Apple’s production has been diversified to India, Vietnam and Thailand. But these regions will also face tariff increases under Trump’s plan.
Apple has the biggest losses among the “Magnificent Seven” of the tech industry.
Only Apple, Microsoft, and Tesla closed Monday lower. The Nasdaq, however, barely managed a 0.1% increase after last weeks brutal 10% drop — it’s worst performance in over five years.
CNBC’s Jim Cramer added to market fears by saying he believed a recession was likely due to new tariffs.
He warned investors to not panic-sell.
Major banks won’t fail
Cramer said that, while tariffs were “real trouble” to the US economy, he believes the financial system is strong and doesn’t expect a repetition of the Great Recession.
We don’t think the entire economic system is in danger. Cramer stated that he does not believe major banks are going to fail.
The President said that he could calm market concerns “with a stroke of the pen”, by showing his willingness to discuss trade terms.
Cramer warned that investors could face “a real problem” if President Trump focuses on only punishing China, rather than working to improve trade relations.
Analysts believe that Apple must either raise its product prices or absorb additional tariff costs.
Apple$AAPL now trades below the price Warren Buffett, Berkshire Hathaway and Berkshire Hathaway bought it for last year
UBS predicts that Apple’s iPhone 5 will cost $350 more than it currently costs, which is about 30% more.
Barclays’ Tim Long says that if Apple does not adjust its pricing, it could see Apple’s per-share earnings drop by up to 15%.
Apple could also rearrange its supply chains to import products from lower-taxed countries.
Apple’s stock could continue to fluctuate in the short term as such a change would be slow.
Cramer said that the market has not yet reached its bottom, but there are still plenty of stocks at a discount that can be bought.
During this time of uncertainty, he advised that investors should be patient and not make emotional decisions to sell.
Apple’s stock decline highlights the wider risks facing US tech giants, as global uncertainty and trade tensions continue to shake investor confidence.
The post Apple’s Market Cap Loss Nears $640B As Tariff Fears Mount; Jim Cramer advises Investors Not to Panic Sell appeared first on ICD
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