Apple's stock bubble continued to deflate Thursday.
Shares of Apple (AAPL) plunged more than 12%, as investors grew skeptical about the iPhone maker's growth prospects. Despite reporting a record quarterly profit, Apple's forecasts showed signs of slowing consumer demand for its products, particularly its iPhones
Apple's stock has been on a steady decline for months. In fact, shares have plunged more than 36% from their all-time intraday high of $705, reached Sept. 21, 2012.
Since then, Apple's stock has dropped in value by nearly $230 billion, with its valuation slipping to $424 billion in just four months.
With the decline, Apple is a relative bargain, trading at 10 times earnings estimates, down from a PE of 15 when the stock was at its highest point. Compare that to Google (GOOG), which currently trades at 16 times its expected 2013 earnings.
Almost exactly one year ago, Apple nudged out Exxon Mobil (XOM) to become the most valuable publicly traded company in the world.
While it still holds the top spot, Apple's recent sell-off is narrowing the gap. Exxon's valuation is now just $7 billion below Apple's.
Related: What Apple's earnings really mean
Analysts expect Apple's net income to decline to $10.1 billion in the current quarter, down from $11.6 billion a year earlier. That would mark Apple's first profit decline in 9 years. Not quite the legacy shareholders wanted Tim Cook to build when he took over as CEO.
Following Apple's latest earnings report, a slew of Wall Street analysts swiftly downgraded the company's stock.
Nomura's analysts said Apple's conservative guidance was "now real rather than deliberately conservative." Quite the paradigm shift for the company, which under former CEO Steve Jobs was known for setting expectations low and blowing past them each and every quarter.
The other real threat is that Apple will be forced to drive sales by lowering its prices and in turn hampering its profits.
Related: Apple burned by analysts' overheated expectations
Analysts at RBC, Deutsche Bank, Oppenheimer, Jefferies, Scotia Capital, Morgan Stanley and Nomura all lowered their price targets. However, the lowered price targets between $490 and $625 are still higher than Apple's current level. Morgan Stanley also removed the stock from its best ideas list.
Analysts at Wells Fargo and JPMorgan were willing to brave the drop, maintaining their respective "outperform" and "overweight" ratings. Oracle Investment Research maintained its "strong buy" rating "for now."
"Sure, Apple had a record quarter. But this horserace has changed,' said Oracle analyst Laurence Balter. "It used to be Apple's game to win, now its Samsung's game to win."
Samsung, which logged record-breaking sales of its latest Galaxy phone, is locked in a tight race with Apple to see who will dominate the U.S. smartphone market.
