CNBC’s Jim Cramer said Tuesday that he thought Apple‘s stock would be down further after the iPhone maker announced it would not meet its quarterly revenue forecast due to the coronavirus outbreak.
Shares of Apple closed down 1.83%, or $5.95, on Tuesday. Cramer said on “Squawk Box” he thought the stock would be down about $10.
Apple’s announcement Monday cited coronavirus impacts on both global iPhone supply, as well as weaker demand from Chinese consumers.
“I am surprised it’s not down more because it’s not just supply, it’s demand,” the “Mad Money” host said. “Demand has to come down because they don’t do much shopping in China. And supply, it’s not them. It’s supply chain. It’s some of the companies that need to give them the supplies.”
“I can’t come up with a reason short term to buy it,” Cramer added.
Apple had previously said it expected net sales between $63 billion to $67 billion in its fiscal second quarter. It did not provide an updated range Monday.
Cramer said part of the reason why Apple’s stock may not be lower is because “not a lot of people want to sell anything,” given the market’s success so far in 2020. The S&P 500 is up 4.62% year to date. The Dow opened slightly lower, falling 77 points. The benchmark hit a record high last week.
Apple’s stock in particular is up 8% year to date and 86% in the past 12 months.
Cramer said Apple’s relatively muted move shows some investors think the coronavirus in China “is more under under control than I do.”
Another potential explanation is that investors were already anticipating coronavirus impacts, Cramer said.
The outbreak led Apple to to temporarily pause production and shutter retail stores in China. Some retail stores reopened with limited schedules last week.
“I think there are a lot of people who felt this would happen and were just waiting for that shoe to fall,” he said.
In fact, Apple acknowledged it in January, when it provided a $4 billion range of quarterly guidance that was wider than usual.
“As you can see from the range, anticipates some level of issue there. Otherwise, we would not have a $4 billion range,” Apple CEO Tim Cook said at the time.
“I do think if you believe the coronavirus is going to get better, you buy it right here,” Cramer said.