Trending tickers: Apple, Microsoft, Intel and Kingfisher

Vicky McKeever

The world's most valuable company Apple saw billions wiped off its market capitalisation on Monday, after an analyst warned of weak demand for its new iPhone 16.

Shares in the tech company were down nearly 3% at market close on Monday, taking its market valuation to $3.29tn (£2.49tn).

TF International Securities’ analyst Ming-Chi Kuo said in a post on Medium that he had calculated first-weekend pre-order sales for the iPhone 16 to be an estimated 37 million units, around 12.7% lower than first-weekend sales of the iPhone 15 last year.

He said: "One of the key factors for the lower-than-expected demand for the iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release."

The iPhone 16 is due to hit store shelves on 20 September, but its generative artificial intelligence platform Apple Intelligence is set to begin its rollout as a software update for US English users in October.

Read more: FTSE 100 LIVE: European markets higher as traders look to central bank decisions

Maxim Group managing director and senior consumer internet analyst Tom Forte told Yahoo Finance on Monday: "I think the challenge for Apple, as reflected in those reports, is that they're trying to get a consumer to buy new hardware, which is coming out in the month of September.

"But the best-selling point for that hardware, especially for consumers in the US — Apple Intelligence, the AI-related features — those aren't coming out until beta next month."

The world's second-most valuable company Microsoft had a positive trading session on Monday, following the news that its board had approved a new share buyback programme of up to $60bn.

The company also declared a quarterly dividend of $0.83 per share, an increase of 10% on the previous quarter.

Shares closed Monday's session closed slightly higher and were up more than 1% in pre-market trading on Tuesday.

Russ Mould, investment director at AJ Bell, said: "The share buyback juggernaut has moved into the fast lane.

Read more: What are share repurchases?

“While tech companies are increasingly paying more generous dividends to shareholders, their preferred method of deploying surplus cash is to buy back shares."

When companies buy back shares this reduces the amount on the market, which boosts earnings per share and in turn, can drive the market value of a business higher.

Mould said: "Fundamentally, investors love share buybacks. They particularly love them when they are least expected, which is certainly the case for Microsoft. One might have expected the tech giant to spend all its surplus cash on AI-related investments, but it is clearly balancing the needs of the business with keeping shareholders happy."

Another tech company in the green was chipmaker Intel, with shares up more than 6% at Monday's close and up nearly 7% in pre-market trading.

Intel CEO Pat Gelsinger announced in a memo to staff that it had agreed a deal to make custom chips for Amazon's (AMZN) web services business.

Gelsinger said the company planned to establish Intel Foundry, its contract manufacturing business, as an independent subsidiary business. Earlier this year, Intel said operating losses for the foundry business had deepened to $7bn in 2023.

Gelsinger also said the company was more than halfway to its targets of reducing its workforce by around 15,000 by the end of 2024.

Read more: Stocks that are trending today

Intel has faced challenges this year, as it missed second-quarter estimates on sales, gross profit margins and earnings, citing challenging market conditions and higher-than-expected costs to increase production of its AI chips. The company also decided to suspend its dividend, which will come into effect in the fourth quarter of the year.

Shares are still down 58% year-to-date, but the stock has ticked higher in the last few days, starting with news on Friday that the European Commission had given Poland the green light to grant the company more than $1.9bn in state aid to support its chip assembly and testing plant.

B&Q-owner Kingfisher surged nearly 7% on Tuesday morning, after the company posted a 2.3% rise in pre-tax profits in the first half of its year to £324m.

The DIY-chain owner also lifted its guidance for full-year adjusted pre-tax profits to a tighter range of between £510m and £550m, up from £490m to £550m.

Thierry Garnier, CEO of Kingfisher, said that, as anticipated, demand for "big ticket" items such as kitchens and bathrooms "remained weak, in line with the broader market, while seasonal category sales trends have improved since early July".

This latest update shows continued improvement on last autumn, when the company issued profit warnings in September and then November.

Read more: Gold hits record high as investors anticipate major US Fed rate cut

Richard Hunter, head of markets at Interactive Investor, said: “Kingfisher has seen some home improvement of its own, with the UK and Ireland continuing to prop up the wider business against a generally tough European backdrop.

"In terms of the market consensus, the general view of the shares as a hold could conceivably come under some positive pressure should investors recognise an improving direction of travel.”

Download the Yahoo Finance app, available for Apple and Android.

Advertisement