When the market opens on Friday, Apple could have lost its $1 trillion valuation.
- Apple is in danger of losing its $1 trillion market cap.
- Shares in Apple slid as much as 7% or more in after-hours trading, following its quarterly earnings report.
- Investors may have been spooked by a big miss on iPhone sales, as well as a soft revenue forecast for the next quarter.
- Still, after-hours trading doesn't officially affect a company's market cap, and it all comes down to what happens on Friday morning when markets are open again.
Wall Street was unimpressed with Apple's quarterly earnings results, announced on Thursday — so much so, that shares plunged over 7% after the bell, putting Apple in danger of losing its much-vaunted market cap of $1 trillion.
At the time of writing, Apple stock is priced at $206.30 in after-hours trading, and still moving around. Should that price hold through the opening bell on Friday, Apple will have a market cap below that $1 trillion threshold. The threshold is $207.45; any Apple share price less than that will value the company below that line.
Notably, that threshold may actually move higher by the time markets open on Friday. Apple reported that it bought back a hefty number of its own shares in the previous quarter. That means on Friday morning, Apple will update the number of shares it has outstanding, which can and will have an effect on its market cap.
Apple made headlines earlier this year when it became the first-ever American company to reach a $1 trillion market cap.
While Apple's earnings beat Wall Street expectations on both the top and bottom lines, there appear to be two main sources for the investor negativity.
First, Apple whiffed on iPhone sales. In the quarter, Apple sold 46.9 million iPhones, well short of Wall Street expectations of 48.4 million. Apple also announced on Thursday that it will stop breaking out iPhone, Mac, and iPad unit sales entirely.
Second, Apple gave a lower-than-expected revenue forecast for the holiday quarter of this year. Apple projects that it will generate between $89 billion and $93 billion in revenue for the quarter ending in December. Wall Street was expecting Apple to project revenues of about $93 billion, placing the company’s estimates on the low end.
Still, for better or for worse, nothing is going to happen to Apple's $1 trillion valuation until Friday morning: A company's market cap isn't affected by after-hour trading, and it all comes down to how investors are feeling by the time the opening bell rings.