Apple and Tesla: Tech shares tumble amid supply issues
Stocks of Apple and Tesla have fallen as worries about production line delays in China have grown.
Since June 2021, Apple’s stock has dropped to its lowest level. From a record high in November 2021, the price of Tesla’s stock has fallen by 73%.
COVID restrictions and weeks of lockdowns have made it difficult for businesses to maintain production in China.
The announcement by China that it will relax its tight travel quarantine regulations on January 8 is welcome news for many investors who anticipate easier supply chain movement in 2023.
However, global investors are also being wary in light of more interest rate increases, a recession in the global economy, and the ongoing conflict in Ukraine.
Analysts predict that it will take time for output to resume its upswing given the surge of COVID cases in important manufacturing centers.
Following instability at its “iPhone City” plant in Zhangzhou, Apple supplier Foxconn experienced production delays earlier this year. According to the business, revenue for November was down 11% from the same month in 2021.
According to media reports this week, Tesla’s Shanghai manufacturing facility reduced output as the number of COVID infections grew in China.
Elon Musk, the CEO of Tesla, has also drawn criticism from investors for his frequent use of inflammatory language. Musk acquired control of Twitter in October after a protracted court struggle, and since then, he has devoted a sizable portion of his time to managing the social media network. His purported diversion during this period has been noted by some as another factor contributing to the decline in Tesla’s share price.
When people voted against keeping him in charge of the platform in a tweet last week, Elon Musk announced that he would step down as CEO once a replacement was selected.
In his newsletter, Webush tech analyst Dan Ives stated that Musk is seen as being “asleep at the wheel” for Tesla at a time when investors need a CEO to steer them through this Category 5 storm.
Musk is instead entirely focused on Twitter, which has been an unending nightmare for investors.