After a roller coaster week of massive swings up and down, AAPL's stock price is causing investors everywhere, including myself, to re-think their plans for holding AAPL for the long haul.
The WSJ reports that "Apple, the largest public company in the U.S., now makes up more than 4% of the Standard & Poor's 500-stock index and almost 18% of the Nasdaq-100". This means that AAPL is beginning to go beyond the risk threshold for many institutional investors, which has likely contributed to some of the selloff we are experiencing.
According to Tickerspy, AAPL's influence on the Nasdaq-100 index is actually set to decline beginning on May 2, "following an announcement by the exchange that the index will be re-weighted and Apple’s weight in the index will be slashed to 12.3% from 20.5%"
Where the stock price goes from here is yet to be determined. On the one hand, the markets experienced tremendous growth in Q1 and might be due for a slight correction. Since AAPL makes up such a large portion of the market, if the market trends down, AAPL may get dragged down with it. On the other hand, AAPL's P/E ratio is still farely low and companies like Goldman have raised their price target to $750 for APPL.
One thing is for sure, you may want to invest in Prozac or other anxiety drugs because we are in for a very tense and unpredictable Q2.