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(Bloomberg) — Apple has had its weakest start since 2019, putting its long-standing position as the world’s most valuable stock by market capitalization at risk.
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The tech giant’s shares fell as much as 0.8% in Friday afternoon trading after the New York Times reported that the Justice Department was close to filing an antitrust lawsuit against the company. If this trend holds, it would be Apple’s fifth straight day in the red, its longest losing streak since October.
The Cupertino, California-based company, which has been the most valuable publicly traded company since July 2022, has wiped out about $176 billion in market value so far this year, according to data compiled by Bloomberg. Stocks suffered an even bigger decline in the first week of January, making this the largest year-to-date market value destruction on record.
The economic downturn began earlier in the week when the tech giant suffered two downgrades, and analysts said China’s weak macro environment was weighing on demand for iPhones. That has narrowed its lead over fellow tech giant Microsoft, whose stock price has fallen less sharply since the beginning of the year, to less than $100 billion.
“Investors understand how rare it is to have two people go negative,” said Gene Munster, managing partner at Deepwater Asset Management. “I’ve been covering this company for many years, and I’ve never seen a company downgraded twice before reporting its financial results.”
Apple is also likely under pressure as investors reshuffle their portfolios at the beginning of the year.
“Everyone is selling the winners and buying the losers,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “A major rebalance is underway.”
The loss brought Apple’s market capitalization down to about $2.8 trillion, closer to Microsoft’s $2.74 trillion. Microsoft stock fell as much as 0.1% on Friday.
The Windows software maker has benefited from the artificial intelligence deals that have captivated Wall Street over the past year. The software maker is OpenAI’s largest shareholder and has invested about $13 billion in ChatGPT’s parent company.
–With assistance from Matt Turner.
(Updates stock price trend and adds details about antitrust litigation in second paragraph.)
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