By Kevin Kelleher
July 22, 2015

The reigning king of tech stocks took a bad stumble Tuesday. Apple reported financial earnings that, on the face of things, met or exceeded Wall Street’s expectations. Yet there were also signs that sales of its largest product, the iPhone, may be slowing faster than most investors have expected.

And lo, $50 billion in Apple’s market value vanished in a matter of minutes. What happened?

Apple has been branching into other areas like streaming music and the Apple Watch, in addition to its Mac computers and iPad tablets. But these days, the company might as well be called the iPhone company. Smartphones make up to 69% of Apple’s total revenue.

Apple isn’t having trouble selling iPhones. The issue is whether it can keep selling them after the initial surge of demand that follows a new release. Apple says it sold 47.5 million iPhones last quarter. The consensus among analysts had been closer to 49 million, with some of the more bullish analysts arguing that Apple would surprise us with as many as 52 million iPhones sold last quarter.

That didn’t happen. Apple shares fell nearly 8% in a matter of minutes after the numbers were released. This, in spite of the fact that Apple’s revenue rose 33% to $49.6 billion and its net income rose to $1.85 per share, beating Wall Street estimates by four cents a share.

Apple Inc. – Earnings Surprise | FindTheCompany

Here’s the thing. The headline numbers on earnings reports often tell only part of the story, especially with a company like Apple that is so obsessively tracked by analysts, investors, fanboys and bloggers. So yes, Apple beat expectations, but it really just kind of squeaked past them, whereas it typically leaps over them with a substantial margin. In other words, beating the numbers isn’t enough. Investors expect Apple to thrash them.

And again, that didn’t happen. But all of this disappointment is centered around the iPhone. The selloff late July 21 wasn’t driven as much by Apple missing a target set by analysts. It came from a much deeper concern about Apple’s ability to keep dazzling–eight years after it introduced the iPhone–with its technology and design.

“We think the iPhone has a lot of legs to it–many, many, many years,” CEO Tim Cook said after an analyst hinted the company was a little too focused on the iPhone. “We’re in the early innings of it, not the late innings.” Fine, except as any baseball fan knows, there can be some ugly things that happen inning by inning, even when you end up winning the game.

This is precisely the concern around the disappointing iPhone sales. It’s not so much that the iPhone will die. It’s that Apple releases a new generation every two years–with a semi-generation (the 4S, 5S, etc) released midway through the cycle. After Apple released the iPhone 5 in 2012, sales surged early before disappointing for quarters, even through the 5S release. Samsung quickly caught up to the speed and features that once set the iPhone 5 apart. And Apple’s stock flagged.

The 8% drop in Apple shares is a hedge against this scenario playing out again. It may end up being a blip in Apple’s steady march toward a trillion-dollar market cap. But for investors focused on the next few quarters, it’s worrisome. Do investors have to wait for the release of an iPhone 7 in the fall of 2016 to ride a wave higher? Or does Apple have something in store to keep it from becoming a cyclical stock?

Of course, it didn’t help that Apple said that revenue this quarter would come in between $49 million and $51 billion, below the consensus estimate of $51.1 billion. Apple pointed out that its iPhone sales rate is three times the industry average. Which is encouraging, but the broader fear among tech investors is that smartphone sales in general are slowing, having reached market penetration in many global markets.

The iPhone has not only been Apple’s biggest product, but also its most consistently reliable. Sales of the iPad declined 18% last quarter, the sixth straight quarter of year-over-year declines. Apple sold an estimated 2 million Apple Watches last quarter, assuming a median sales price of $499, which isn’t bad but also below the projections some saw of 3 million or more.

So Apple may have stumbled but it is still far from falling. Over the long term, it’s proven foolish to bet against the company. Then again Apple’s stock doesn’t rise in a straight line but rather takes detours into valleys. The bullish scenario is this earnings report is Apple has run into a ditch rather than a valley. The bearish scenario is more volatility to the downside before Apple resumes its long-term ascent.

For those focused on the near term, however, there is another concern. The tech earnings season started off on an optimistic note, with Google surprising with strong results. But already this week we’ve seen IBM disappoint (in its ongoing painful transformation into the cloud), and then Microsoft somehow fall short of what investors wanted. And now Apple.

Most of these disappointing earnings have less to do with a fundamental, widespread weakness among tech companies and more with a sense among investors the rally is peaking. It’s getting harder to excite the bulls now that the bull run is entering its seventh year. Apple, like many of its peers, are pushing forward to a brighter future. But their investors are increasingly showing signs of exhaustion.

Read next: Apple’s Hiring More Car Industry Experts For a Secret Project

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