Apple Shares Fall after Mixed Reality Headset Price Revelation


Apple Shares Fall after Mixed Reality Headset Price Revelation

TEHRAN (Tasnim) – Apple shares soared to an all-time high on Monday, marking the stock's highest price in its 43-year history, ahead of the anticipated launch of its mixed reality Vision Pro headset, but it later took a hit when the tech giant revealed a price tag significantly higher than expected.

During morning and early afternoon trading, the stock climbed as much as 2.2%, reaching a peak of $184.95, surpassing its previous record of $182.94 set in January of the previous year. Yet, the excitement was short-lived as Apple shares declined by approximately 3% in later afternoon trading, closing at just under $180, resulting in a 0.8% loss for the day, according to Forbes.

The decline came immediately after Apple CEO Tim Cook announced that the highly anticipated headset would retail at $3,499, almost 20% higher than the $3,000 price point that experts had predicted prior to the launch at Apple's Worldwide Developers Conference.

Despite the setback on Monday, Apple's shares have seen a remarkable 44% increase in 2023, recovering from last year's 27% decline and leading the broader rebound of the tech industry this year.

With a market capitalization of around $2.8 trillion, Apple now holds a significant lead of approximately $325 billion over Microsoft, making it the most valuable public company globally.

In a client note, Wedbush projected that Apple would sell approximately 150,000 headsets during its first year on the market, resulting in $525 million in sales. This would account for roughly 0.1% of Apple's nearly $400 billion revenue from the previous year.

Apple's market cap has surged by approximately $765 billion this year, surpassing the combined valuations of Berkshire Hathaway, Meta, and Tesla. The sentiment among investors regarding mega-cap tech stocks has shifted from bearish to bullish over the past year, largely influenced by Apple's impressive financial performance, particularly during the first quarter of 2023. Driving Apple's strong financials was a record-breaking $20.9 billion in quarterly revenue from its services segment, which includes App Store sales and other non-product revenue streams. In a client note, Bank of America analysts raised their price target for Apple by 8% to $190, citing significant potential growth in the company's services segment due to the introduction of the new headset.

An investment of $1,000 in Apple's initial public offering in 1980, when shares traded at a split-adjusted level of $0.10, would now be worth nearly $2 million.

Analyst Barton Crockett from Rosenblatt noted that the expectations were low for exciting investors, as "nobody expects this to be a financially meaningful product near-term." Apple's approximate $80 billion market cap decline on Monday afternoon suggests that the company failed to surpass the already dampened expectations.

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