Apple Stock Down as Foxconn at the Center of New COVID Lockdown in China

A new Covid-related shutdown has been implemented in a region of China that houses a sizable factory that manufactures Apple‘s (NASDAQ:AAPL) iPhones.

Foxconn, the primary iPhone manufacturer for Apple (NASDAQ:AAPL), is at the core of the lockdown that began on Wednesday and is presently scheduled to remain until November 9. The lockdown was implemented in the Zhengzhou Airport Economy Zone in central China after 358 locally transmitted Covid cases were reported on Tuesday, according to a Reuters report. The 95 instances that were reported on Monday were more than tripled by that amount.

According to Chinese officials, the lockdown would also include “silent measures” at the Foxconn site and in the surrounding area. These actions reportedly include prohibiting all locals from leaving the area and limiting the usage of the area’s roadways to authorized vehicles for the following week.

The Foxconn complex is so large and employs roughly 200,000 people that it is known as “iPhone City.” Multiple cases of employee unrest and disagreement over travel and other restrictions that have been put in place throughout sections of China as part of Beijing’s “Zero Covid” plan have been described in reports during the past week. An inquiry for comment was not immediately answered by Apple (NASDAQ:AAPL).

The shutdown comes a day after Zhengzhou started easing some of its Covid restrictions. It includes regulating where Foxconn employees work and live. Foxconn reportedly produces up to 70% of all Apple (NASDAQ:AAPL) iPhones, playing a significant role in the company’s iPhone operations. Although Apple (NASDAQ:AAPL) doesn’t publicly announce its iPhone unit sales, the company last week disclosed more than $42B in iPhone revenue for the company’s fiscal fourth quarter.

Apple stock outlook

Samik Chatterjee, an analyst at JPMorgan, stated that the company’s “resilience to a harsh macro through the mix of Products and Services is expected to drive a re-rating” after reading Apple’s earnings report last week. The analyst keeps Apple with an “overweight” rating and a $200 price target, which is about 32% higher than where it is right now. Apple Stock Falls Due To The News Of A Drop In Sales At The App Store.

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