Apple’s skyrocketing stock price is headed back to earth.
After a series of surges that carried them beyond $700 in September, Apple shares have lately been giving up some of those gains. They slipped more than 2 percent to close at $635.85 Tuesday. And that leaves them well below the all-time high of $705.07 they reached on Sept. 21 — the day the iPhone 5 debuted.
Why the correction? Tough to say. Clearly, it began when Apple said it sold five million iPhone 5s during the device’s first weekend at market. As impressive as that number might be, it disappointed Wall Street analysts, who had been expecting a few million more. Since then, concerns about limited iPhone 5 inventory have stoked fears that Apple might not be able to fully meet demand during the holiday quarter. And labor issues at Foxconn, the company’s manufacturing partner, have only made matters worse.
Despite these concerns, analysts believe that this is only a brief stumble, and Apple shares will rally again. And with the much-anticipated iPad mini nearing launch, that does seem likely.
“We believe concerns are overdone and this appears to be a typical consolidation after a big run,” says Sterne Agee’s Shaw Wu. “From our supply chain checks, demand remains robust with improving production and the bottleneck moving to assembly of the iPhone 5 itself vs. component constraints. In addition, we are picking up much increased component activity with what appears to be for an iPad mini.”