Downgrades hit Apple amid AI disappointment
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The news: Apple shares continued their downward trend on Tuesday, falling 4.6% following a couple of downgrades by sell-side analysts amid slumping iPhone sales and AI disappointment.
The context: Jefferies downgraded Apple to underperform, citing an 18.2% drop in iPhone sales in China during the December quarter and a global decline of 5%.
Analyst Edison Lee highlighted the weakness in iPhone sales is worse than expected, with US consumers remaining indifferent to AI features, which dampens hopes for an upgrade cycle.
Boutique broker Loop Capital also cut its rating to hold, warning it expects a “material iPhone demand reduction” beginning in the March quarter and through mid-2025.
Apple’s AI rollout has failed to boost iPhone 16 sales, with Loop calling the effort “dismal.”
JPMorgan, while maintaining a buy rating, lowered its price target to USD260, citing challenges including market share losses in the Chinese market and foreign exchange headwinds.
The numbers: Apple shares have plunged almost 13% so far in January, marking their worst decline since at least December 2022. On Tuesday, they fell as much as 4.61% to as low as USD219.38 before paring back some losses.
The sources: Bloomberg, Investor’s Business Daily
