Apple’s Off the Market Cap Cliff

Are the bears winning this? Apple’s (NASDAQ:AAPL) market capitalization fell below $500 billion for the first time since May on Thursday, standing at $494.45 after the stock closed 2.1 percent down at $525.24. The trend was downward on Friday, too, with shares falling to $507.58 in intraday trading before recovering to $527.68 to round out the week. Apple, touted by some analysts as a potential trillion-dollar company, first passed the half-trillion milestone in late February.

However, the company’s stock has now fallen more than 25 percent over the last two months from its closing high of $702.10 in September when it was booming on the launch of the iPhone 5. The pessimism around the company first stemmed from supply shortage worries regarding the new phone and was exacerbated after recent reports that Foxconn, Apple’s manufacturing partner, was still struggling to keep up with the high demand. Then, late last month, Apple announced big changes to its top management that included the scheduled departure of iOS chief Scott Forstall and new retail head John Browett. Investors did not take the news well and the stock promptly dropped once again.

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Worries have also persisted because alongside its second consecutive earnings miss last quarter, Apple predicted a lower-than-expected profit margin for the December quarter. While the higher costs have been attributed to the launch of several new devices like the iPad mini and analysts have tried to calm the concern by citing Apple’s habit of lowering expectations, margins are a critical component of investors’ measurement of profits.

Apple continues to be the most valuable company in the world, more than $100 billion ahead of Exxon Mobil (NYSE:XOM) with a market cap of around $390 billion and way ahead of tech rivals Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT), both in the low $200 billion range.

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