What do Nike, Tesla, Apple, and Intel Have in Common?

Apple, Tesla, Nike, and Intel experienced over a 10% decline in stock prices since the beginning of the year
Investors, sensing the difficulties faced in China, have begun selling off
“It won’t be long before the Chinese economy recovers, and stock prices begin to rebound”

American companies with high dependency on the Chinese market see their stock prices falling consecutively after their earnings announcements. Despite companies exceeding market expectations in their performance, investors have begun selling off due to concerns about “China risk,” including the economic downturn and demand slowdown. Some in the industry have suggested that the Chinese economy will soon pass its low point and enter into an economic recovery phase. 

On the 21st (local time), Nike announced that it recorded $12.43 billion (approximately 16.6 trillion won) in revenue for the third quarter (December-February) of the 2024 fiscal year. This figure exceeds the revenue forecast of $12.28 billion compiled by a market research firm LSEG. However, Nike’s stock moved in the opposite direction that day due to a pessimistic sales outlook in China. “Growth has slowed as demand has normalized in China after the pandemic,” CNBC analyzed. Nike’s stock went down by 13.55% since the beginning of the year, showing no signs of rising. 

Apple, which generates a fifth of its total sales in China, could not avoid the “China risk” either. Apple recorded $40.373 billion (approximately 54 trillion won) in operating profit for the last quarter of last year, an increase of 12% compared to the same period the previous year. However, unlike other regions, sales in the Chinese region decreased by 13% compared to last year, leading to a drop in stock prices. Apple is struggling, with its stock price down 10.52% since the start of the year.

Tesla, which earned about 25% of its sales in China in the last quarter of last year, is also seeing a continuous drop in its stock price. According to the US investment newspaper “Investor’s Business Daily” on the 24th (local time), Tesla’s stock has plummeted 31.25% in just about three months, recording the highest stock price drop this year. Intel, which is also caught in the war of nerves between the US and China and faces the risk of being kicked out of Chinese government agencies, is no exception. Intel’s stock price has dropped by 15.28% since the beginning of the year.

Meanwhile, experts have expressed an optimistic outlook for the Chinese economy in the future. Jeong Jeong Yeong, a Hanwha Investment & Securities researcher, explained that all indicators of production, consumption, and liquidity within China are pointing to a recovery in the Chinese economy. Shinhan Investment & Securities researcher Choi Won Seok added, “The combined real economic indicators for January and February are improving, centering around production and investment,” and “There is a high possibility that China will pass the bottom of its economy.”