Apple’s Stock Takes a Hit as Analysts Predict Disappointing Earnings
iPhone Sales Slump in China, AI Push Falters
Apple’s stock price took a tumble on Tuesday, falling as much as 3.7% midday, after two prominent analysts downgraded the company’s rating and slashed their price targets. Jefferies analyst Edison Lee reduced his price target by 13% to $200.75, citing expectations of weaker-than-expected results for the December quarter and a miss on second-quarter expectations. Loop Capital also downgraded Apple’s stock from Buy to Hold, with a revised price target of $230.
Weak iPhone Sales in China, AI Disappointment
According to Lee, iPhone sales in China plummeted between 15% and 20% year-over-year, attributed to the rise of local competitors Huawei and Xiaomi, as well as cautious consumer spending amidst a slowing economy. Moreover, Apple’s big push into AI, dubbed Apple Intelligence, has failed to generate the expected sales boost. The platform, launched in batches in October, has struggled to gain traction, despite being touted as a game-changer for the company.
Global iPhone Market Share Slips
The iPhone’s global market share fell roughly 1% year-over-year in Q4 to 23%, according to estimates by Canalys and IDC. This decline occurred despite a 3% increase in smartphone shipments, Canalys reports. Jefferies forecasts that iPhone revenue will decline 0.4% year-over-year for the first quarter, while total Apple sales will grow 2.8%, lower than the firm’s prior estimate of 4.6%.
New Product Launches May Offer Respite
However, Apple is set to debut new products, including a new iPhone SE, entry-level iPads, and MacBook Airs, which could help drive sales in the mid-range smartphone market and other segments. The company will report its first-quarter earnings on January 30, providing a clearer picture of its performance.
Big Tech Rivals Outperform Apple
In contrast, Apple’s Big Tech rivals have fared better over the last year. Meta and Alphabet have seen their stock prices rise 36% and 30%, respectively, while Microsoft has gained 3.5%. The broader S&P 500 has climbed 20% during the same period.
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