Apple's stock hits 2024 rock-bottom (and keeps on dropping) as rivals are ahead in the AI race

2024 has been rough for many, and Apple has been feeling it, too.

Just this week, Apple’s stock price hit the rock-bottom for 2024, closing at $170.12. As of the time of writing, it was traded even lower, at $169.12, but there’s time left until the bell rings.

There is no shortage of reasons why investors are somewhat pessimistic on Apple’s outlook (via 9to5Mac). Following a year of negative revenue growth in 2023, Apple executives forecast only meek growth guidance at its February earnings call. Also, there’s the Chinese problem with iPhone sales, the EU’s $2 billion fine over the App Store policies… and there’s the AI race where Apple is lagging behind.

Big Trouble in Big China

As we’ve reported, consumers in the world's largest smartphone market (that’s just another way of saying China) have spoken and after the first six weeks of 2024, iPhone sales have plunged 24% in China year-over-year. Apple’s China sales missed analysts’ estimation by more than $3 billion. The report has scared investors into believing there will be sustained iPhone sales weakness throughout this year, with local smartphone manufacturers like Huawei becoming increasingly popular in China once more.

The EU fine also made the stock drop

Apple stock plummeted almost 3% after it became known that the EU declared Apple’s anti-steering policies as illegal and imposed a $2 billion fine. “Investors fear that more App Store policy changes are coming driven by regulation from pressure around the world, and that will cut into Apple’s Services growth trajectory with lower commissions from In-App Purchase”, the story goes.

Overall, Apple's stock is down 8.3% so far this year, and almost 13% off all-time highs set at the end of last year.

The AI race

Other giant corporations have been riding the AI wave in the last months: the artificial-intelligence hype train fuelled rally is paying off. Microsoft stock is up 8.5% this year, which pales in comparison with Nvidia’s stock that has soared 78% in 2024 alone, with its market cap valuation approaching Apple in size.

In contrast, Apple is seen to be somewhat behind the times on AI, having not announced any major generative AI features so far. However, rumors indicate that is set to change at WWDC this June, with iOS 18 featuring deep AI integration across the system.

2023 was a blessing from above for Nvidia. With brutal gains of 240%, it was the best-performing S&P 500 stock in 2023. Arm Holdings' shares (another chip-making company that has been AI-oriented lately) also saw an incredible jump of 80% in recent weeks – that’s what high demand for AI chips does.

It was recently that Nvidia eclipsed Alphabet (think Google) as the third most valuable US company. Ahead of Nvidia are only Microsoft (currently numero uno) and the silver medalist Apple.