LOS ANGELES/SAN FRANCISCO: A rare Wall Street downgrade stoked fears that Apple Inc's torrid growth is slowing and sent its shares sliding for the second straight day on Wednesday, March 16 as nervous investors ponder the impact on the tech industry from Japan's largest-ever earthquake.
The world's largest TECHNOLOGY [] company lost about $14 billion of value on Wednesday after JMP Securities' Alex Gauna downgraded the stock, pointing to a sharp pullback in sales growth at Apple's largest Asian contract manufacturer as a sign that business was also slowing at the iPhone and iPad maker.
"There's a risk of complacency. The sell-side has gotten itself into a game of one-upmanship," Gauna said. Investors "should make sure that they're comfortable with the situation ... especially since there's just so much uncertainty right now."
He added: "We know that Japan as a supplier matters."
Apple's stock slide -- the largest single-day loss in almost nine months -- comes amid uncertainty about the impact from the largest earthquake to hit Japan.
While it accounts for 6 percent of Apple's sales and is a major source of components for its screens, many analysts said Apple wielded sufficient clout and a good-enough track record to secure critical components -- for now.
Apple shares ended down 4.5 percent at $330.01 in heavy volume, following a 2.3 percent slide on Tuesday.
The company, which last week launched its iPad 2 tablet to crowds of fans outside its stores, has lost close to $22 billion in value over two days.
Gauna downgraded Apple to "market perform" from "market outperform," based on signs of a severe slowdown in sales growth at Hon Hai Precision Industry Co Ltd, a contract manufacturer and subsidiary of Foxconn that is heavily reliant on Apple's business.
Covering Apple for less than a year, he is among just five of 54 analysts on Thomson Reuters I/B/E/S with a "sell," "hold" or "neutral" rating on the stock, which is a perennial market darling and mainstay of global portfolios.
In an apparent response to Gauna's report, Oppenheimer analyst Yair Reiner said Apple's contribution to Hon Hai's revenue -- about a fifth -- was "limited," and made light of attempts to correlate their performance.
Ticonderoga analyst Brian White said the shift toward the iPad 2 -- which hit store shelves March 11 -- meant a gradual ramp-down of original iPad output, which could in turn have taken the air out of Hon Hai's sails.
BLOWING SALES
JMP said year-over-year sales growth in Hon Hai slowed from 84 percent in December to 37 percent in January and 26 percent in February.
Before this week's sell-off, Apple's stock price had doubled over 18 months. Apple declined to comment on the recent drop. - Reuters
The world's largest TECHNOLOGY [] company lost about $14 billion of value on Wednesday after JMP Securities' Alex Gauna downgraded the stock, pointing to a sharp pullback in sales growth at Apple's largest Asian contract manufacturer as a sign that business was also slowing at the iPhone and iPad maker.
"There's a risk of complacency. The sell-side has gotten itself into a game of one-upmanship," Gauna said. Investors "should make sure that they're comfortable with the situation ... especially since there's just so much uncertainty right now."
He added: "We know that Japan as a supplier matters."
Apple's stock slide -- the largest single-day loss in almost nine months -- comes amid uncertainty about the impact from the largest earthquake to hit Japan.
While it accounts for 6 percent of Apple's sales and is a major source of components for its screens, many analysts said Apple wielded sufficient clout and a good-enough track record to secure critical components -- for now.
Apple shares ended down 4.5 percent at $330.01 in heavy volume, following a 2.3 percent slide on Tuesday.
The company, which last week launched its iPad 2 tablet to crowds of fans outside its stores, has lost close to $22 billion in value over two days.
Gauna downgraded Apple to "market perform" from "market outperform," based on signs of a severe slowdown in sales growth at Hon Hai Precision Industry Co Ltd, a contract manufacturer and subsidiary of Foxconn that is heavily reliant on Apple's business.
Covering Apple for less than a year, he is among just five of 54 analysts on Thomson Reuters I/B/E/S with a "sell," "hold" or "neutral" rating on the stock, which is a perennial market darling and mainstay of global portfolios.
In an apparent response to Gauna's report, Oppenheimer analyst Yair Reiner said Apple's contribution to Hon Hai's revenue -- about a fifth -- was "limited," and made light of attempts to correlate their performance.
Ticonderoga analyst Brian White said the shift toward the iPad 2 -- which hit store shelves March 11 -- meant a gradual ramp-down of original iPad output, which could in turn have taken the air out of Hon Hai's sails.
BLOWING SALES
JMP said year-over-year sales growth in Hon Hai slowed from 84 percent in December to 37 percent in January and 26 percent in February.
Before this week's sell-off, Apple's stock price had doubled over 18 months. Apple declined to comment on the recent drop. - Reuters
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