Amazon shares surged higher today on strong cloud revenue but Apple posted slowing sales, including of the iPhone and that has led to a heavy round of profit taking. Shares are down 4.6%.
The entire summer run-up in Apple has now been erased and the fear is that we could get a deeper retracement, perhaps to the 38.2% or 50% levels of the one-way trade that started at the turn of the year. That would imply a further 7-12% decline.
Here is a sense of how revenues have trended in the past year, despite an inflationary environment:
- Rev.: $81.8B, -1% y/y
- iPhone: $39.7B, -2% y/y
- Mac: $6.8B, -7% y/y
- iPad: $5.8B, -20% y/y
- Services: $21.2B, +8% y/y
The bull case for Apple has been rising services fees but if you’re selling less hardware, then there isn’t a platform for people to buy the services on.
The decline in Apple shares has contributed to a turnaround in the broader market with the S&P 500 now down 21 points to 4480 from a high of 4540. That’s a 1% reversal.
This article was written by Adam Button at www.forexlive.com.