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Apple (AAPL) isn’t having a happy new year Wednesday as its stock suffered its third downgrade in less than two weeks. The latest accusation comes from Redburn Atlantic’s James Caldwell, who gave the stock a “neutral” rating while keeping his price target at $200, citing concerns about slowing iPhone sales and potential regulatory headwinds. ‘ was lowered to ‘.
Barclays and Piper Sandler also announced downgrades on Apple stock last week, with Barclays’ Tim Long downgrading the stock from equal weight to underweight and lowering his price target from $161 to $160. Meanwhile, Piper Sandler’s Harsh Kumar downgraded Apple’s stock to “neutral.”
As of Wednesday afternoon, the tech giant’s stock had fallen about 4% in the first few days of 2024. Meanwhile, Apple’s tech giants like Microsoft (MSFT), Google (GOOG, GOOGL), and Meta (META) are up 1.9%, 2.2%, and 4.9%, respectively.
Redburn Atlantic, Barclays and Piper Sandler generally point to potential weaknesses in Apple’s iPhone and services division as a whole. Both Barclays’ Long and Piper Sandler’s Kumar point to China as a key concern, with Long pointing to Barclays’ latest examination showing a gradual deterioration in iPhone 15 data points outside the region. Mr. Kumar cited the deterioration of China’s macro environment.
Greater China is Apple’s third-largest revenue driver after North America and Europe. In 2023, the region accounted for $72.6 billion of the company’s total revenue of $383.3 billion.
Long said Apple should report December quarter sales in line with market expectations, but will report March sales below market consensus.
Kumar said negative news surrounding the ongoing Apple Watch patent dispute and antitrust battle could pose a problem for Apple going forward.
Most analysts remain positive on Apple
But Wall Street isn’t entirely condemning the iPhone maker. Of the 53 analysts tracking Apple, 32 maintain a buy rating and 16 maintain a hold rating. Just 5 analysts rate the stock as a “sell”.
Evercore ISI’s Amit Daryanani reiterated his outperform rating on Apple with a $220 price target and said now may be the time to buy on the decline in Apple’s stock price.
And he acknowledged that the Apple Watch ban is problematic and could put Apple’s multibillion-dollar agreement to make Google the default search engine in Safari in jeopardy. But there are more positives than negatives in Apple’s story.
“As some of the fear fades and we move into a more positive news flow (Vision Pro), [Apple] We may begin to reevaluate in a more positive way,” Daryanani wrote.
Morgan Stanley’s Eric Woodring says Apple’s 2024 could be a big breakthrough for the company.
“Not only do we believe fundamentals are on the path to recovery (albeit with some volatility in the short term), but more importantly, we believe that 2024 will see an opportunity for Apple’s Edge AI. “It’s likely that LLM-powered Siri 2.0 and a broader Gen AI-enabled operating system (introduced at WWDC in June) could accelerate the iPhone upgrade cycle,” he told investors. I am writing this in my notes.
Apple hasn’t announced any specific generative AI products, instead focusing on machine learning to improve the accuracy of its autocomplete feature. But the company is reportedly working hard to integrate the technology into future products.
Apple could also benefit from an expected rebound in laptop and desktop sales, as consumers who bought computers at the beginning of the pandemic start looking for newer, faster systems.
All of this comes as Apple prepares to launch its $3,499 Vision Pro spatial computing headset in February. Pre-orders for the device will begin on January 19th. Vision Pro, Apple’s first new product category in about a decade, is expected to see slow sales due to its relatively high price.
And depending on how Vision Pro rolls out, Apple could drive significant interest in the headset among both consumers and business users. No, most people won’t be able to afford Vision Pro in the first place, but just creating buzz around the product could benefit Apple’s stock price.
With the Vision Pro launch just weeks away, we won’t have to wait long to find out whether Apple’s slow start to 2024 is a fluke or a long-term trend.
Daniel Howley I’m the technology editor at Yahoo Finance. He has been covering the technology industry since his 2011. You can follow him on Twitter. @Daniel Howley.
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