The recent drop in Apple stock was linked to the crisis that impacted SVB Financial, but Apple’s solid balance sheet and stable position may help it outperform the S&P 500 in the long term.
- Apple stock experienced a drop in price on Friday, March 10 due to the crisis that impacted SVB Financial and its subsidiary, Silicon Valley Bank.
- Despite being headquartered in the same general region, there is no evidence that Apple has been impacted by the same issues as SVB Financial, and the company’s solid balance sheet may help it weather market storms.
- While AAPL is likely to experience short-term pressure, the company’s position as a stable blue chip company may help it outperform the S&P 500 in the longer term.
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Apple (AAPL) – Get Free Reportstock took a significant hit on Friday, March 10, breaking through the psychological floor of $150 per share.
The sudden drop in Apple’s share price was due in part to a crisis that impacted SVB Financial, a banking institution known for its active role in the tech sector and venture capital space. SVB Financial’s subsidiary, Silicon Valley Bank, was shut down by regulatory agencies due to capital issues, sending shockwaves throughout the market.
Could AAPL Be Impacted?
Despite being headquartered in the same region as SVB Financial, there is no evidence that Apple has been impacted by the same issues that led to the shutdown of Silicon Valley Bank.
Apple’s solid balance sheet, with $54 billion in net cash, and the company’s significant intangible value in the form of brand appreciation and customer loyalty positions the iPhone maker as a fortress in the market.
But at the same time, AAPL is the largest stock in the S&P 500, and its performance is largely correlated with the broad market index. A decline in investor confidence in the banking sector, for example, could still spell trouble for shares of the Cupertino company.
This seems to be exactly what happened in the last two trading days of last week, when AAPL dropped from an intraday peak of nearly $155 a piece.
What’s Next For Apple Stock?
In the short term, AAPL is likely to remain under pressure until the market gets a firmer grip on the risks to the broader economy and market.
However, in the longer term, Apple may outperform the S&P 500 (SPY), especially in the case of an extended bearish reaction. The Cupertino company is generally considered a stabler blue chip company that can better weather storms like this one.
The fallout from the SVB crisis on Apple stock is likely to be twofold.
- First, the stock could experience short-term pressure as the market reacts to the news of the Silicon Valley Bank shutdown.
- Second, in the longer term, Apple may outperform the S&P 500 due to the fortress characteristics mentioned above, especially in the case of an extended bearish reaction.
Key Takeaway
In conclusion, the recent drop in Apple stock on Friday, March 10, can be attributed to the crisis that impacted SVB Financial and its subsidiary, Silicon Valley Bank.
Although there is no evidence that Apple has been directly impacted by this issue, the company’s position as the largest stock in the S&P 500 means that its performance is likely to follow that of the broader market index.
While AAPL is likely to experience short-term pressure due to the uncertainty in the market, the company’s strong balance sheet and stable position in the tech sector may help it to outperform the S&P 500 in the longer term.
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(Disclaimer: this is not investment advice. The author may be long one or more stocks mentioned in this report. The article may contain affiliate links, but these partnerships do not influence editorial content. The author may use AI tools, including OpenAI’s ChatGPT, to create and summarize some of the article’s content. Thanks for supporting the Apple Maven.)
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