Apple Shares Set For Further 5% Drop Amid China Woes And EU Fine, Says Jim Cramer: 'Own It, Don't Trade It'

As Apple Inc AAPL grapples with a downturn in China and a recent European Commission fine, CNBC’s Jim Cramer foresees a further 5% dip in its shares. Despite the ongoing turmoil, Cramer remains steadfast in his decision to hold on to his shares.

What Happened: Dwindling demand for Apple in China has led to a sharp drop in the tech giant’s shares, sinking to a four-month low. The shares plunged 3% to around $170 each, marking the seventh slump in eight sessions. Despite predicting a further 5% drop to $160, Cramer has no plans to offload his Apple shares, reported CNBC.

In a further blow, Apple’s iPhone sales in China fell by 24% in the initial six weeks of 2024, as per Counterpoint Research. The falloff is attributed to stiff competition from affordable domestic smartphone producers and tech behemoth Huawei.

Additionally, the European Commission slapped Apple with a close to $2 billion fine over allegations of breaking competition laws in music streaming. Regardless of these hurdles, Cramer upholds his “own it, don’t trade it” stance on Apple’s shares, considering the current situation as a trading decline rather than weak fundamentals.

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However, Apple is betting on AI-integrated iPhones as a potential solution to its China woes. CEO Tim Cook announced significant investments in generative AI during Apple’s last annual shareholder meeting.

Why It Matters: Apple’s recent setbacks have raised alarm bells, with the company’s latest Vision Pro launch receiving mixed reviews and the hefty $3,499 starting price proving a challenge. Analysts have urged Apple to step up its AI game or risk being outpaced.

Cramer has voiced concerns over Apple’s future in China, predicting no immediate positive outcomes following the 24% plunge in iPhone sales.

However, some analysts, like Dan Ives of Wedbush, see the current slump as a buying opportunity, warning that selling Apple stock ahead of its AI developments could prove a significant mistake.

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