Chipmakers slide on concerns over iPhone 16 sales 📉

Disturbing signals from the smartphone market are pulling down not only Apple's stock price, which is losing over 3% today, but also reflecting on the stock prices of its key suppliers. The chipmakers that supply the company are seeing sharp discounts today. 

Preliminary pre-orders for the latest iPhone show a deterioration in demand compared to last year. Published by industry analyst Ming-Chi Kuo, the pre-order estimate for iPhone 16 series is around 37 million units (-12.7% compared to iPhone 15 series pre-orders). The strongest drag on results are the Pro and Pro Max series phones, which are estimated to have fallen -27% and -16% YoY, respectively. 

Moreover, the estimated waiting time for the iPhone 16 Pro shortened by almost 9 days compared to the result of its predecessor a year earlier, which is an almost 33% decline. On the one hand, this could represent an improvement on the supply side of new iPhones, but with the current market situation, a cooler demand for Apple products is a more likely scenario. One factor potentially putting off customers' willingness to buy Apple products in pre-orders is the delay in the introduction of Apple Intelligence, which will not yet be available at launch. Since the introduction of artificial intelligence was supposed to be one of the leading improvements to the new models, some customers may not feel the need to purchase a new model sooner for now and prefer to wait for the introduction of the new technology. 

Concerns about demand for Apple products are taking a toll on the stock prices of its suppliers. Broadcom (AVGO.US), which is responsible for producing the chips that receive 5G frequencies in new iPhones, is losing -2.6% today. Cirrus Logic (CRUS.US), whose parts are used in the cameras of the latest iPhones, is also losing, falling more than 6.6%. Qorvo (QRVO.US) (-8%), Skyworks (SWKS.US) (-7%) and Micron (MU.US) (-5%) also record strong declines. 

Broadcom chart (D1) 

Broadcom's stock price, after strong gains since the beginning of October 2023, has entered a tightening sideways trend bounded at its widest point from above by the level of about $176 and from below by about $129. Looking at the geometry and the tightening trend of the quotation, today's decline may start a repricing of the company's stock to the limit of about $142. Before that, support for the stock price may be the level of about $150 set by the 100-day exponential moving average (EMA100 - the light blue line on the chart). 

Source: xStation