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Apple Analysis and Talking Points

  • Apple Warning Weighs on S&P and Nasdaq
  • Companies Exposed to Apple

Apple Warning Weighs on S&P and Nasdaq

Last night saw Apple provide its first revenue warning in over a decade, confirming the view that global growth is indeed slowing, having cut its revenue guidance to $84bln, down from $89-93bln. The tech giant highlighted that Q4 sales and demand for iPhone’s in China had been slowing with CEO Tim Cook noting that US-China trade wars had put an additional pressure on the Chinese economy. Following the announcement, Apple shares dropped over 7%, adding to the 30% plunge seen since October 1st, resulting in a market cap loss of over $300bln, since topping $1tln. Consequently, the S&P 500 and Nasdaq are noticeably weaker, with the latter falling some 2.7%. Of note, Apple is the 3rd largest stock in the S&P 500, behind Microsoft and Amazon.

Apple Price Chart: Daily Time Frame (Feb 2018 – Jan 2019)

Apple Profit Warning Weighs on S&P 500 and Nasdaq, Exposed Stocks Plunge

Companies Exposed to Apple

The fallout from Apple saw iPhone makers pressured in the Asian session with the likes of Hon Hai and Pegatron, which generate 45% and 61% of its revenue from Apple, dropping 1.7-1.9%. Elsewhere, other Apple exposed stocks include European chipmakers, which tumbled across the board. AMS plunged 12%, while Dialog Semiconductor and STMicroelectronics dropped 7% and 4.2%, respectively. Consequently, with lower sales expected for iPhone units, this will likely provide a revenue headwind for the chipmakers and as such, spark a wave of lower profit guidance from exposed stocks going forward. Of note, Dialog Semiconductor has around 75% exposure to Apple, while AMS and STM have roughly 40-45% and 10-15% exposure.

Apple Profit Warning Weighs on S&P 500 and Nasdaq, Exposed Stocks Plunge

Source: Bloomberg

Trading Resources

How to Trade S&P 500 Index: Strategies, Tips & Trading Hours

Difference between Dow, Nasdaq, and S&P 500: Major Facts & Opportunities

How to Trade in a Bear Market: A Short Seller’s Guide

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at

Follow Justin on Twitter @JMcQueenFX