Doubts are surfacing regarding Apple Inc.’s immunity to economic risks, as a string of negative news threatens the tech giant’s standing as the world’s most valuable company.

Sluggish sales of its new iPhone models in China have raised concerns about Apple’s ability to maintain its premium valuation and avoid a four-quarter decline in revenue, marking its worst performance since 2001.

Apple’s challenges include political tensions with China, overheating devices, and a recent downgrade by KeyBanc.

James Abate, Chief Investment Officer at Centre Asset Management, points out the disconnect between Apple’s limited growth and its high stock price.

He suggests that investors should consider using put options to hedge against Apple’s valuation risk due to its systemic importance in the stock market.

Although Apple’s stock has declined by 10% since the end of July, it continues to exert significant influence in the markets.

Nevertheless, some other mega-cap tech companies may offer more attractive growth prospects and trade at more reasonable multiples. Amazon, Microsoft, Nvidia, Alphabet, and Meta have compelling cases for growth in various areas, while Apple has demonstrated little revenue growth recently.

Apple is set to report its fourth-quarter results in early November, with analysts expecting a 1% decline in revenue compared to the year-ago period. In contrast, revenue for the overall S&P 500 tech sector is projected to increase by 1.5% this quarter.

Despite the anticipation of a return to positive revenue growth in 2024, the pace is considerably slower than in previous years, and new product categories like the Vision Pro headset are unlikely to drive substantial growth in the near future.

KeyBanc Capital Markets recently downgraded Apple to a hold rating due to concerns about valuation and growth potential, and this has contributed to a 9% drop in the consensus rating on the stock.

While challenges persist, some analysts are cautious about adding to positions in Apple, awaiting a potential opportunity to buy at a lower price. However, the company’s strong brand, supply chain expertise, and historical free cash flow make it a formidable player in the tech industry, deserving a degree of trust, despite current uncertainties.