Economy News: Alibaba shares bottom out iPhone demand slows
The shares of Alibaba Group Holding Ltd. listed on the US stock exchanges are at their lowest level in history and investors are still staying away from these shares.
Alibaba’s American Warehouse Receipt (ADR) is trading at 18.7x on a reported profit basis. This marks the lowest level since the company began trading in the US markets in 2014 and the largest discount to the average multiple of the Nasdaq 100 Index.
ADR fell 4 percent on Wednesday to its lowest level since May 2017. The company’s shares, traded in the Hong Kong market, lost 3.7 percent.
This decline in Alibaba’s value, which has led to a meltdown of $526 million in the last 13 months, is further deepened by concerns about the company’s outlook.
Fintech, data, online advertising and content, which are Alibaba’s most important sources of growth, are under the scrutiny of regulators in Beijing. In its latest earnings update, the company announced last month, quarterly sales fell short of forecasts and forecast a slowdown in revenue growth for 2022.
iPhone demand is slowing
Apple has informed its parts suppliers that demand for the iPhone 13 model is weakening. This indicated that some consumers are moving away from hard-to-find products.
Faced with the challenges of global supply shortages, Apple Inc. now struggling with a different problem, slowing demand.
The company has informed its parts suppliers that demand for the iPhone 13 model has weakened, sources familiar with the matter told Bloomberg. This indicated that some consumers are moving away from hard-to-find products.
According to Bloomberg’s report, Apple has already reduced its iPhone 13 production target of 90 million units by 10 million units this year, due to parts shortages. However, with the parts supply problem fixed, most of this loss was expected to be compensated next year.
Sources noted that the company has now notified its suppliers that these orders may not be fulfilled.
Apple headed for a record-breaking holiday period as analysts predicted the company will increase its sales by 6 percent to $117.9 billion in the final quarter of this year.
But this won’t be the great quarter Apple and Wall Street previously predicted. Parts shortages and delivery delays have disappointed many consumers. The rise in inflation and the omicron variant have also increased the concerns of consumers who are uneasy due to the pandemic, which may lead to reduced sales.
