How Apple Stock Can Plummet 30%

Core Insights - Apple has experienced significant stock volatility in the past, with notable declines during major market downturns, indicating that its stock is not immune to sharp declines [1][5]. Recent Performance - Apple's stock has recently reached record levels, driven by strong demand for the iPhone 17 and robust Services revenue, although its elevated valuation is under scrutiny due to uncertainties in its AI strategy and regulatory challenges [3][10]. Historical Declines - Historical data shows that Apple has faced steep declines during significant market events, including an over 80% drop during the Dot-Com Bubble and nearly 61% during the Global Financial Crisis, with recent corrections causing declines of approximately 30-40% [5][6]. Regulatory Challenges - Apple faces global antitrust actions that threaten its App Store profitability, including a €500 million penalty from the EU and ongoing U.S. legal challenges, with a trial set for February 2026 [10]. AI Development - The company is experiencing a delay in its AI initiatives, with a significant revamp of Siri not expected until 2026, while competitors are advancing more rapidly in AI features [10]. Dependence on China - Apple's reliance on Chinese manufacturing for over 90% of its iPhones exposes it to geopolitical risks and potential tariffs, which could impact profit margins by up to 9%, prompting plans to diversify production to India by 2027 [10]. Financial Metrics - Apple reported a revenue growth of 6.0% for the last twelve months (LTM) and a 1.8% average over three years, with a free cash flow margin of approximately 23.5% and an operating margin of 31.9% LTM [11]. The stock is currently priced at a P/E multiple of 38.2 [11].