Apple shares fall as interest rates, supply issues and recession fears hit tech sector | Business News

In stark contrast to early 2022, Apple has wiped $1tn (£829bn) off its market value at the start of the year as tech companies face stiff headwinds from rising interest rates, production problems and concerns about the global economy.

The tech giant’s market capitalization fell below $2 trillion (£1.65 trillion) as investors sold shares, a year after it became the only company to be valued at $3 trillion (£2.48 trillion).

It already claims to be the first public company to hit a $1 trillion market capitalization in August 2018.

Today, no technology company is worth more than $2 trillion, but apple It is close to Microsoft at $1.8 trillion (£1.49 trillion) for second place.

The iPhone maker is by no means the worst-hit tech company to experience a decline in market capitalization.

Its shares have fallen 27% over the past year, underperforming the tech-heavy Nasdaq’s 33% decline.

Likewise, Tesla’s value also pplummeted Over the past year, as investor confidence has declined and Elon Musk sell shares.

The automaker faces growing competition from electric vehicles, fears its CEO will be distracted by the Twitter acquisition, and supply problem If it produces more cars than it delivers.

Both Tesla and Apple have experienced production issues at their factories in China, and those problems appear to be continuing as COVID cases in China rapidly increase.

The automaker reportedly slowed production at its Shanghai plant late last year and in May.

Apple has also encountered difficulties with production in China and said in November it had experienced “significant” disruptions iphone assembly After the outbreak of COVID-19.

The decline in company value illustrates the difficulties facing the industry.

Higher inflation rate – at UK 10.7% with US 7.1% – Make prices rise across the board, with rising interest rates spelling the end of cheap debt. Combined, these issues have led to recession fears and a hit to investor confidence.

These economic conditions show no signs of abating, as central banks remain committed to raising interest rates to bring inflation down.

unemployment Major players such as Meta and Amazon have already had an impact on the entire industry.

Payments company PayPal announced plans to cut 300 jobs from its 2,000 EMEA headquarters staff.

Earlier this year, food delivery startup Flipdish, valued at more than 1 billion euros, announced job cuts to control costs, rather than hiring 700 jobs in a year as previously planned.

Payments company Stripe also said it would lay off 14% of its global workforce, or about 1,000 people.

Source link