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Are tech giants set up for a reality check on the soaring values? Chip shortages and delivery delays this holiday season has investors worried. Image Credit: Reuters

New York: Apple Inc. and Amazon.com Inc. shares are set to shed more than $180 billion in combined market value after the tech giants served notice of a difficult holiday season and reported disappointing earnings.

Apple fell as much as 3.8 per cent in US pre-market trading after CEO Tim Cook said supply constraints were affecting most of its products. Amazon dropped nearly 5 per cent after warning that high costs could wipe out any profit in its most important quarter of the year.

Still, most analysts backed their buy calls, saying the issues are transitory. "Even Goliath feels the pain," Evercore ISI's Amit Daryanani said of Apple's warning on chip shortages, while maintaining his outperform rating. The news from the  heavyweights overshadowed what had been a strong earnings period for the sector. Earlier this week, Alphabet Inc. and Microsoft Corp. both rose more than 4 per cent after results beat expectations.

Apple's drop in pre-market trading puts Microsoft on pace to become the world's largest listed company by market capitalization. For Amazon, the impact of cost inflation and supply shortages on smaller competitors could present an opportunity to grab even more market share, according to Morgan Stanley's Brian Nowak, who has an overweight rating.

"Amazon sounds very confident around its capacity and supply chain advantages heading into the holidays," said Barclays Plc analyst Ross Sandler, who also rates the stock overweight.