(Updated with closing stock price.)
Apple (AAPL) was down big in Monday trading—to the extent that a $25 fall on a $605 stock qualifies as big. The fact that Cupertino is not exempt from the immutable laws of physics will certainly shock those who have been bidding up Apple’s market value into what was supposed to be a straight shot to $1 trillion.
Apple shares fell for a fifth day—closing down 4 percent, their largest one-day decline since October—on speculation that demand for the iPad may slip and that wireless carriers will cut their iPhone subsidies.
Last week analysts at Wedge Partners wrote that demand for the newest version of Apple’s iPad is beginning to wane and hinted that Apple’s earnings report next week will show weaker-than-expected tablet sales. “Is Apple [the] best name in tech? Yes,” they wrote. “Have we seen the stock price plummet in the past, when expectations were out of whack with results? Yes. In our view, there is some risk to this happening again in the March quarter, and the result would likely be the stock coming back down to earth.”
In reaction to Apple’s Monday pullback, Gene Munster, Apple’s outspoken Trillion-Dollar Bull at Piper Jaffray, put out an afternoon note that reiterated his Buy rating and $910 price target—in spite of what he said were jitters on the Street over the strength of Apple’s Mac computer business, which is on the verge of a product cycle refresh.
Mama said there’d be days like this. But Mama also knows that any other company wouldn’t much mind this kind of day after having added $206 billion in market capitalization, or one Wal-Mart (WMT), in just four and a half months.