Apple's stock woes look set to continue after the iPhone maker's suppliers tumbled on fears about "market saturation" and future demand.
The Cupertino, California-based company's shares were down slightly in premarket after falling 4.4% on Tuesday — underperforming a particularly brutal 3.8% drop in the Nasdaq — and is also down in premarket New York trading. Apple is missing out on a minor relief rally amongst other so-called FAANG (Facebook, Apple, Amazon, Netflix, and Google) stocks.
Apple stock was hurt in part on Tuesday by a downgrade by HSBC, after it cited an overwhelming dependence on a single product.
"What has made the success of Apple, a concentrated portfolio of highly desirable (and pricey) products, is now facing the reality of market saturation," said HSBC.
In Asia, shares of its suppliers fell:
- Pegatron, in Taiwan, fell 1.7%
- Chinese acoustics technology supplier AAC Technologies lost 3.7%
- Taiwan's Flexium Interconnect was down 3.9%
- Taiwan's Largan Precision declined 3.7%
In the US, Lumentum Holdings, an optical products manufacturer, fell 5.5% after it cut its outlook last month.
Cirrus Logic closed down 1.9% down — having fallen as much as 5.8% days after it cut its December revenue outlook due to recent weakness in the smartphone market .Apple accounts for about 82% of Cirrus' sales.
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Similarly, Qorvo, a North Carolina semiconductor company, dropped 5.3% on concerns about Apple, which recently lost its status as the world's most valuable business.
Another Apple supplier, Broadcom, which reports earnings on Thursday, fell 4.1%. The company, which designs semiconductors, is believed to make around $10 on each iPhone sold, according to JPMorgan, cited by CNBC.
Other manufacturers, such as Austria's AMS, which develops facial recognition software, cut its revenue forecast last month as iPhone sales diminished.
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