Important points
Apple (AAPL) stock fell on Tuesday after Jefferies downgraded the stock from “hold” to “underperform” on Monday. This comes as sluggish iPhone sales and weak demand for artificial intelligence (AI) features in new models are expected to lead to a fall in the tech giant’s stock price. Quarterly earnings below forecast.
Jefferies also lowered Apple’s price target from $211.84 to $200.75 per share.
Apple is scheduled to release numbers for the first quarter of 2025 on Thursday, January 30th.
Jefferies analysts said, “We are revising our forecasts downward due to weak iPhone sales and the consumer electronics market, as well as a lower outlook for iPhone 17/18 due to slower AI adoption and commercialization.” The brokerage added that it does not expect Apple to meet its initial sales figures. Revenue guidance for the 2025 quarter is 5% growth. He also said the company’s outlook for the March quarter “could be disappointing.”
JP Morgan remains overweight but lowers price target
Separately, JPMorgan (JPM) analysts on Tuesday maintained their overweight call on Apple, but lowered their price target from $265 to $260, citing caution about the company’s outlook.
Among their concerns are a strong dollar amid limited demand for Apple products, “flat sales” given the company’s current AI capabilities, and weak demand in China. Apple is already “past the peak of its product cycle” and its premium phones do not benefit from local government subsidies for low-to-mid-priced phones, so its market share in China has declined. They said they will continue to lose.
Apple shares plunged last Thursday as data from research firm Canalys showed the tech giant lost its coveted position as China’s biggest smartphone seller last year. Apple’s Chinese version of the iPhone does not have the recently launched AI features.
The stock was down about 3.5% on Tuesday, to about $222.40, and will be down almost 12% in 2025.
