Apple: The Lone Tech Giant Hitting New Lows Today

Investors are cheering today as the broader market climbs to five-year highs. The S&P 500 has topped the milestone 1,500 level, which hasn't been seen since 2007. The market has now recovered fully from the devastating crash of 2008 and continues marching higher. The broad-based index is just 4% away from reaching the all-time high close of 1,562 set in October 2007. This is the S&P's longest winning streak since 2004.

The only investors today that aren't feeling the joy are Apple (NASDAQ: AAPL  ) shareholders, myself included.

Sitting on the sidelines
Shares of the Mac maker continue to sell off, down by 3% at today's low, following yesterday's 12% plunge after releasing its fourth-quarter earnings. In doing so, Apple has tapped a fresh 52-week low of approximately $437, a whopping 38% loss from its all-time highs of over $705 reached just four months ago. This comes just after reporting a record quarter in revenue, iPhone units, iPad units, and net income.

Investors are skeptical that Apple can continue to put up the growth it has over the past five years as it runs into the law of large numbers. Even if companies are incredibly profitable, investors crave growth, and not even Apple is immune in that regard.

Meanwhile, other tech players are pushing up on 52-week highs.

In it to win it
(NASDAQ: NFLX  ) has skyrocketed to new highs over the past two days after reporting earnings. Shares climbed as high as $171 today, representing a two-day gain of 66% after the online video streamer put up strong subscriber growth and turned a profit when analysts were expecting red ink. Netflix is a bona fide battleground stock, and its tremendous rally is undoubtedly being amplified by a short squeeze. At the end of December, there were 13.2 million shares held short, a massive 27% of its float.

eBay (NASDAQ: EBAY  ) is also riding high as it hits prices not seen since 2004. After reporting earnings last week, the online auctioneer has enjoyed upward momentum thanks to its double-digit gain in net income for 2012. The company has enjoyed piggybacking on the mobile revolution as consumers can now bid on the go, and eBay's mobile volume more than doubled in 2012 to $13 billion. Just this morning, the company also got a boost from two analyst ratings. Susquehanna started shares at "positive" with a $66 price target, while Bernstein upgraded the stock to outperform.

Symantec (NASDAQ: SYMC  ) reported fiscal third quarter on the same day that Apple did, except its investors are cheering its results. Also like Apple, Symantec put up a record quarter with revenue of $1.8 billion. That's particularly impressive considering the company is in the midst of a transition. CEO Steve Bennett was appointed just last summer and management plans on laying off 1,000 workers in the hopes of boosting operating margins. The online security specialist is now back to where it was before the 2008 crash.

Where's bottom?
Apple has quickly fallen out of investor favor and no longer carries the same sway with moving the broader market. That's in part due to its decline in market cap, as both the S&P and Nasdaq Composite are market-cap weighted. It still dominates the tech-heavy Nasdaq with a 9.5% weighting, but to a lesser extent than it used to.

The Dow Jones Industrial Average seems destined to never include Apple, even though the iPhone maker is about as blue of a blue chip as there is. That's because the Dow is price-weighted, and without a stock split to bring Apple's price down, it would dominate the index. Even with Apple's sell-off, shares trade for over twice what IBM trades for, which is currently the most expensive component at $205.

All three of the major indexes continue to flirt with new highs, while Apple remains the lonely tech giant wondering when it will see its bottom.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

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  • Report this Comment On January 27, 2013, at 4:27 AM, AdamChew wrote:

    Isn't it a pity Apple can't make a profit of $5B a quarter while every other company is making 1 billion a quarter.

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