Apple Inc. (NASDAQ:AAPL) has lost over 6% on the day, and it’s reasonable for many investors to be fearful as shares of the tech company are approaching the dreaded “death cross” (see Should You Trade Apple Near The Death Cross?). Qualitatively speaking, the stock’s selloff has been attributed to a number of different factors, but one prominent analyst says it may be at least partially a result of an article in the DigiTimes.
Originally reported by AppleInsider, Piper Jaffray’s Gene Munster — who has been making quite a few predictions lately (see E-Commerce Can Make Facebook Billions) — said in a note to investors that:
“A DigiTimes article from today suggests that iPhone 5 is selling well based on comments from wireless chipset providers and seems to suggest upside to the Street’s 43-45 million estimate for December […] In the same article, DigiTimes is suggesting a 20% q/q decline in Apple’s demand for parts and components in March. We believe this 20% decline is to be expected coming off of a launch quarter and do not believe it is an indication of how units might trend in March.”
Additionally, a few writers have speculated that the negative Apple Inc. (NASDAQ:AAPL) move was the result of decreased confidence about a deal between the company and China Mobile Ltd. (NYSE:CHL) because the telecom giant reached a deal with Nokia to carry its Lumia 920T. Munster pokes a hole in the thinking that this will hurt Apple over the long term, saying that “China Mobile already carries multiple smartphones from multiple vendors. We continue to expect China Mobile to add the iPhone in the back half of 2013.”
In his note, the Piper Jaffray analyst also mentions the death cross that has technical analysts in a tizzy, in which he mentions that “we believe that for this technical indication, most of the damage has been done to AAPL, but there could be a worst case additional 10% move to the downside which could be the next meaningful area of support.” This worst-case-scenario might be achieved if Apple Inc. (NASDAQ:AAPL)’s 50 day moving average crosses below its 200 day moving average, but it’s worth noting that this has not happened as of yet.
From a valuation standpoint, you know where we stand (see Is It Safe To Buy Apple Again?), and the stock is still the top pick among billionaire hedge fund managers (see the full list here). It’s encouraging to see a few rational rebuttals from Gene Munster’s corner, who has made a career out of shedding insight on the tech giants, Apple Inc. (NASDAQ:AAPL) in particular. Let us know your thoughts about Apple at the moment, and if you’re using the selloff to boost your stake, or if you’re sitting on the sidelines.
