Shares in Apple opened 8.6 per cent down on Wall Street this afternoon, after a shock revenue warning from chief executive Tim Cook caused shivers across global markets and exchanges.
In an open letter to investors published last night, Apple cut its revenue forecast for the busy Christmas quarter by 7.8 per cent. The tech giant is now anticipating revenue of $84bn (£66.8bn) for the final three months of 2018, down five per cent from the same period in 2017 and $9bn lower than Apple's original highest forecast for the quarter.
According to the Apple boss, "more than 100 per cent" of its missed revenue could be attributed to a sales decline in China, as demand for its iPhone and iPad products weakened and fewer customers chose to upgrade their smartphones.
New York-based law firm Bernstein Liebhart has filed a class action lawsuit on behalf of Apple shareholders this afternoon, citing "allegations that Apple and/or its executives may have issued materially misleading business information to the investing public".
Both Apple and Bernstein Liebhard have been contacted for comment.
At least 15 Wall Street analysts lowered their price targets on Apple's stock before markets opened today, with one slashing its price target by $75 to $200 per share.
The Dow Jones industrial average fell by around one per cent in early trading, while the S&P 500 slipped similarly. The Nasdaq is down around 1.4 per cent, marking a slight improvement on the losses predicted by US futures earlier today.
Apple briefly became the world's first trillion-dollar public company in 2018, before a disappointing set of results in its fourth quarter caused its share price to begin a steady decline. It is now the world's fourth biggest firm valued at $685bn, behind Microsoft, Amazon and Google-parent Alphabet.
Cook said Apple did not foresee the magnitude of the economic deceleration in China, despite expecting some challenges in key emerging markets.
Analysts and investors had been expecting a downturn in Apple's success for some time, after the company said it would stop disclosing unit sales data for its iPhones and other hardware products in November.
AJ Bell investment director Russ Mould said the revenue warning has now "confirmed investors’ worst fears" about the firm's future, as Apple is now expected to report its first year-on-year declines in sales and operating profit in two years.
The stock has fallen about 30 per cent since Cook first said in a November earnings call that the company might experience lower sales over the Christmas period.