Apple shares plunged nearly 10 percent on Friday after the company issued a disappointing forecast, citing a shortage of key components as the artificial intelligence-driven data centre boom continues to strain global supply chains.
The decline, if it holds, would mark the worst single-day performance for the stock since the pandemic-driven selloff in March 2020.
It would wipe out nearly $500 billion from the market value of Apple and hand the title of the most valuable company in the world back to AI chip maker Nvidia, just days after Apple had reclaimed it.
Speaking on his final earnings call as chief executive before handing control to John Ternus in September and moving into the role of executive chairman, Tim Cook described the shortages as very significant and said the company had limited options to resolve them.
Big technology firms have been buying up advanced chip-making capacity and memory chips to power AI data centres, driving shortages and price increases that are expected to shrink both the personal computer and smartphone markets this year.
Apple had partly offset rising memory costs by drawing on stockpiled inventory, but Cook said that buffer was running out, leaving the company unable to meet strong demand for iPhones and Macs because of processor shortages.
The companys forecast for revenue growth of between 9.0 percent and 11 percent in the current quarter fell short of a Wall Street estimate of roughly 12 percent.
Softer growth in the services division also weighed on otherwise strong results for the June quarter, a trend that concerned investors given it coincided with strong iPhone sales, which normally boost revenue from App Store purchases and services including Apple Music and Apple TV.
Analysts at Morgan Stanley said the leverage of Apple over its supply chain appeared to be in question, adding that the impact of AI on products and services remained unclear.
At least four brokerages cut their price targets for the stock, while three raised theirs, moving the median target to $330, according to LSEG data. Shares of Apple had risen 22.7 percent for the year as of Thursday close.
