Apple Stock Is Sliding: What's Going On?

Apple Inc AAPL shares are trading lower Monday due to concerns of an iPhone production shortfall amid ongoing protests in China.

What Happened: Protesters in Shanghai and Beijing spoke out against China's strict zero COVID policy over the weekend after a deadly fire erupted in Urumqi. Reports indicate that several people voiced concerns, claiming the fire was caused by extreme lockdown measures, which delayed rescue efforts.

Apple's key manufacturing hub of Zhengzhou is likely to see production shortfalls of close to 6 million iPhone Pro units this year as a result of strict covid policies. 

Analyst Take: Wedbush analyst Daniel Ives said China's zero COVID policy has reached a tipping point in a new note to clients.

"Apple is essentially caught in the cross-fire heading into the all-important Christmas time period," Ives said.

The Wedbush analyst expects iPhone sales to be impacted by at least 5%. That number could jump to 10% depending on how production shortfalls and protests play out. iPhone Pro inventory in Apple stores is down between 35% and 45% heading into December, he added.

"Our bullish thesis on Apple is demand driven which is very firm, although these brutal supply shortages in the near-term remain a clear overhang for the stock to navigate," Ives said.

Related Link: Apple Analyst Says China COVID Policy Reaching Tipping Point: How iPhone Sales Will Be Impacted

AAPL Price Action: Apple has a 52-week high of $182.94 and a 52-week low of $129.04.

The stock was down 2.04% at $145.10 at time of publication, according to Benzinga Pro.

Photo: courtesy of Apple.

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