Apple (AAPL) is experiencing a challenging start to the new year with its stock facing its third downgrade in less than two weeks. Redburn Atlantic’s James Cordwell downgraded the stock’s rating to Neutral due to concerns about slowing iPhone sales and potential regulatory challenges. Meanwhile, Barclays and Piper Sandler also issued downgrades last week. Barclays’ Tim Long lowered the stock’s rating from Equal Weight to Underweight and reduced its price target, while Piper Sandler’s Harsh Kumar downgraded the stock to Neutral.
Apple’s stock has dropped approximately 4% in the first few days of 2024, whereas its Big Tech peers Microsoft (MSFT), Google (GOOG, GOOGL), and Meta (META) have seen increases of 1.9%, 2.2%, and 4.9% respectively.
Redburn Atlantic, Barclays, and Piper Sandler have raised concerns about potential weakness in Apple’s iPhone and services segment. Both Barclays’ Long and Piper Sandler’s Kumar highlight China as a major concern, citing worse iPhone 15 data points and China’s deteriorating macro environment.
Greater China is Apple’s third-largest revenue driver. In 2023, it accounted for $72.6 billion of the company’s $383.3 billion in total revenue.
While Apple is expected to report December quarter revenue in line with market expectations, Long predicts that the company will report March revenue below market consensus.
Kumar suggests that negative news related to the ongoing Apple Watch patent controversy and antitrust fights could pose problems for Apple in the future.
Most analysts are still positive on Apple
Despite the downgrades, the majority of analysts remain positive on Apple. Out of 53 analysts tracking the company, 32 maintain Buy ratings, 16 have Hold ratings, and only five have Sell ratings.
Amit Daryanani from Evercore ISI reiterates his Outperform rating and suggests that now might be a good time to buy Apple’s stock. He highlights the positive aspects of Apple’s story, including the potential impact of the Vision Pro and a resurgence in laptop and desktop sales.
Erik Woodring from Morgan Stanley believes that Apple’s fundamentals are on the path to recovery and that 2024 will be a significant year for the company, particularly due to its “Edge AI” opportunity.
Apple is set to launch its Vision Pro spatial computing headset in February, which is expected to generate interest among consumers and enterprise users. The success of the product could benefit Apple’s stock price.
The launch of the Vision Pro is just a few weeks away, and it remains to be seen whether Apple’s slow start to 2024 is a temporary setback or a long-term trend.
Daniel Howley is the tech editor at Yahoo Finance and has been covering the tech industry since 2011. Follow him on Twitter @DanielHowley.
Click here for the latest technology news that will impact the stock market.
Read the latest financial and business news from Yahoo Finance.
