Sep 28, 2022 (PressReach.com via COMTEX) -- As a result of the weak demand for the product, Apple is said to have given instructions to its suppliers to reduce their efforts to boost the assembly of its iPhone 14 range by as many as 6 million units in the second half of the year. This information was reportedly included in an article that was published earlier by Bloomberg.
AAPL stock saw its price fall to $145.89 per share and was on course to begin trading at a level that would be the lowest it has been in the last two months.
Following news that the tech giant was abandoning plans to increase manufacturing of the most recent generation of its iconic iPhone, Apple Inc. /zigman2/quotes/202934861/composite AAPL -1.38% shares dropped 4% in premarket trade on Wednesday, putting pressure on other growth stocks.
This news caused the market to react negatively to other growth stocks.
Other growth stocks , such as Microsoft Corporation /zigman2/quotes/207732364/composite MSFT -0.31% , Amazon.com /zigman2/quotes/210331248/composite AMZN +0.24% , Google’s parent firm Alphabet /zigman2/quotes/202490156/lastsale GOOGL -2.10% , and Tesla Inc. /zigman2/quotes/203558040/lastsale TSLA -3.21% , saw their prices fall by between 1.5% and 3% as a direct result of the news.
“Weaker consumer demand is to be expected when utility bills are going up, interest rates are going up, and mortgage costs are going higher,” said Patrick Armstrong, chief investment officer at Plurimi Wealth in London. “Weaker consumer demand is expected when interest rates are going up, and mortgage costs are increasing.” Patrick Armstrong, who serves as chief investment officer, states, “discretionary expenditure is likely to be constrained by that.”
“Apple /zigman2/quotes/202934861/composite AAPL -1.38% is not immune to it, and it’s probably symbolic of what’s occurring across the board right now in terms of many various organizations,”
Due to the quick increase in interest rates implemented by the Federal Reserve in the United States this year, rate-sensitive growth equities have suffered significant losses.
In comparison, the S&P 500 value index has only been down 17% so far this year, while the growth component of the index has dropped 29%.
The announcement caused a decline in the share prices of other semiconductor companies; Apple /zigman2/quotes/202934861/composite AAPL -1.38% suppliers Broadcom /zigman2/quotes/200646538/composite AVGO -1.39% , Qualcomm /zigman2/quotes/206679220/composite QCOM -1.31% , Taiwan Semiconductor, Skyworks Solutions /zigman2/quotes/201417573/composite SWKS -0.30% , and ON Semiconductor all saw their stock prices drop by between 1.2% and 2.8%.
Apple’s European component suppliers, including STMicroelectronics, BE Semiconductor, Nordic Semiconductor, ASM International /zigman2/quotes/202986227/delayed ASMIY -1.81% , and Infineon /zigman2/quotes/203514023/delayed IFNNY +0.31% , all had declines ranging from 1.6% to 4.7%. ASML also experienced a decline of 1.6%.
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