If you assume the market estimates the true value of a company, any reasonable model will have it predict a company’s value with an error that may be either too high or too low.
When a new data point comes in, the market adjusts its estimate. That can be lower than it was, certainly if its previous estimate was too high.
It seems the market expected Apple to do even better.
That has about as much to do with earnings as a coin flip. If it was entirely that everyone would just buy based on P/E. and since that’s a public number all stocks would be predictable. Instead we have TSLA at 128 P/E and AAPL at 28 P/E, MDB is at 9 P/E and was -2 a few months ago. None of that makes sense it’s purely speculation. I’ve seen stocks completely miss and fly off good guidance. And stocks beat by a lot and sell off because there is no volume.
When a new data point comes in, the market adjusts its estimate. That can be lower than it was, certainly if its previous estimate was too high.
It seems the market expected Apple to do even better.