Apple's stock is facing downward pressure following a downgrade from Jefferies, which shifted its rating to "underperform" from "hold" and slashed the price target to $200.75. Analyst Edison Lee cited concerns over Apple's revenue trajectory, particularly in light of an 18.2% decline in iPhone sales in China during the December quarter. This decline has been attributed to increased competition from local brands like Huawei, which has gained market share with its Mate 70 series. Lee also expressed skepticism about Apple's artificial intelligence initiatives, noting that consumer enthusiasm for AI-driven smartphone features remains muted. The downgrade comes ahead of Apple's earnings report on January 30, where the company is expected to miss its first-quarter revenue growth forecast and provide conservative guidance for the second quarter.
The downgrade from Jefferies is not an isolated event, as Moffett Nathanson also recently downgraded Apple to "sell," citing similar concerns about valuation and iPhone sales. The broader Wall Street sentiment, however, remains mixed, with several analysts maintaining a "buy" rating on the stock. Despite this, the recent data showing a significant drop in iPhone sales in China has raised alarms about Apple's growth prospects in one of its key markets. Additionally, new Chinese policies limiting smartphone subsidies could further impact Apple's sales, as most iPhone models are priced above the subsidy threshold.
Apple's shares are currently trading at $226.48, down 1.52% from the previous close of $229.98. The stock experienced a high of $232.29 and a low of $228.48 during the trading session.