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Due to several analyst downgrades, apple (AAPL) stock is reeling at the start of the new year, but many on Wall Street see AAPL’s decline as an opportunity to pick up the iPhone maker’s stock cheap.
Apple has always been a top Dow Jones stock on Wall Street, but concerns about demand in China have made some analysts wary of the company’s name. Piper Sandler analyst Harsh Kumar last week downgraded his recommendation on the stock from overweight (buy) to neutral (equivalent to hold), citing the weak macroeconomic backdrop in China.
“We are concerned about device inventory,” Kumar wrote in a note to customers. “The growth rate of unit sales has reached its peak.”
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Piper Sandler’s downgrade follows a more bearish downgrade (from “neutral” to “underweight”) by Barclays analyst Tim Long two days earlier. Mr. Long also cited weak revenue in China as a cause for concern.
Apple’s iPhone sales are sluggish in China due to the economic slowdown. Analysts point out that while consumers are holding on to their expensive iPhones longer between refresh cycles, rival Huawei’s new 5G phones are also chipping away at demand for their iPhones. There is.
In short, AAPL stock is still up more than 40% in value terms over the past 52 weeks, but is down more than 4% since the beginning of the year. The world’s most valuable publicly traded companies lost more than $135 billion in market capitalization in 2024 alone, nearly their entire market capitalization. general electric (GE). Pulling back the chart to AAPL stock’s peak in mid-December, the company has since lost an astonishing $225 billion in market capitalization.
The Street says to buy Apple stock.
Morgan Stanley analyst Eric Woodring is bullish, noting that Wall Street’s sentiment toward Apple (as estimated by a combination of buy, hold, and sell ratings) is at its lowest level since September 2020. represents the opinion of Analysts say this is a contrarian buy signal. ” and advises clients to buy Apple stock on a bearish note.
Woodring argues that Apple’s fundamentals are on the road to recovery, although there may be some volatility in the short term. More importantly, 2024 will likely be the year in which Apple’s artificial intelligence (AI) efforts bear fruit, the analyst added.
Looking at TheStreet’s recommendations, it’s certainly the most uncertain stock for Apple since 2020. That said, the company remains bullish overall on the stock. Of the 45 analysts covering AAPL surveyed by S&P Global Market Intelligence, 20 say it’s a strong buy, 7 say it’s a buy, 14 say it’s a hold, 3 say it’s a sell, and 1 say it’s a sell. People rate it as a “strong sell.” Although there are pros and cons to this, the consensus was to recommend “buy”.
Meanwhile, analysts have an average price target of $198.81, implying an upside of more than 8% for Apple stock over the next 12 months. Wall Street strategists see the S&P 500’s potential upside of about 5% over the next year.
Apple buy-and-hold investors can largely ignore recent stock price movements. After all, Apple was a long-term ownership dream. The company was the world’s best stock in the 30 years leading up to 2020. And anyone who invested $1,000 in Apple stock 20 years ago would be very happy with today’s results as well.
That’s part of the reason the billionaire investor is a big fan of Apple stock. When it comes to top hedge fund stocks, it’s hard to beat Apple. And of course, no one is a bigger fan of Apple, or a fan of buying on its weaknesses, than Warren Buffett.
iPhone manufacturers account for about half of the total Berkshire Hathaway (BRK.B) stock portfolio, but Buffett hasn’t added to it in a while because AAPL, like the rest of the Magnificent 7 stocks, has been on a hot streak.
Don’t be surprised if in a few months from now we learn from regulatory filings that smart money was buying a lot of Apple stock during the riots in January of this year.
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