Apple (NASDAQ: AAPL) stock price is at risk of more downside after plunging by more than 15.5% from its highest point in December. It has entered into a correction and the worse could happen ahead of the first quarter earnings scheduled for May 2nd.
Apple woes are risingApple’s share price has crashed hard, making it the second-worst-performing Magnificent 7 company after Tesla, which has plunged by over 30% this year.
The company is facing a mountain of challenges, leading investors to question its next important catalyst. It has abandoned the Apple car project after spending billions of dollars in Research and Development (R&D).
Apple is facing a mountain of legal issues in the United States and Europe. In the US, the company is being sued for being a monopoly. I disagree with these claims since Apple faces substantial competition from Android phones.
Most importantly, its sales growth has crashed hard in the past few years because people are no longer upgrading their iPhones as they did in the past. Its annual revenue retreated from $394 billion in 2022 to $383 billion in 2023. iPhone sales have been in a downward trend.
At the same time, Apple’s services business is not growing as it did in the past. Besides, most people have already decided on whether they will use its services like Apple Music and Apple TV or not.
The next important catalyst for the Apple stock price will be the upcoming earnings, which will provide more insights about the Vision Pro product. These will be the first full quarter earnings since the product was launched.
Analysts are not excited about Apple’s earnings. The average estimate is that the company’s revenue came in at $83 billion in Q1, a 4.5% decline from the same period in 2023. For the year, analysts see the total revenue rising by just 1%.
Apple’s shares have no real catalyst going forward. iPhone sales have retreated while demand for the iPad has dropped. I don’t know many people who are buying brand-new iPads these days. And those who do, they are spending more years with them. iPad sales crashed to $7.1 billion in Q4.
Apple’s computers are still the best in the game but their sales growth is still not strong. For one, most people with Apple laptops and desktops stay for longer with them.
Apple stock price forecast
The daily chart shows that the AAPL share price formed a death cross on March 5th. This pattern happened when the 50-day and 200-day Weighted Moving Averages (WMA) made a bearish crossover. It has now remained below the two averages since then.
Now, the price sits at the crucial support at $183.40, which is notable since it failed to break below it in March.
A move below this level will point to more downside, with the next support level being at $165.30, the lowest swing on October 26th. This price was the neckline of the double-top pattern at $197.50. If this happens, it could drop to $150 by the next earnings.
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