Apple’s Stock Downgraded: iPhone Sales and AI Demand Concerns
Apple’s stock faced a blow as Jefferies downgraded the tech giant to “underperform” from “hold.” They anticipate Apple’s revenue forecasts for the first quarter of 2025 to fall short due to sluggish iPhone sales and lackluster demand for artificial intelligence (AI) features in recent models.
Jefferies’ price target for Apple was also reduced from $211.84 to $200.75 per share. Apple’s first quarter 2025 results are scheduled to be released on Thursday, January 30.
Weak Sales and Reduced AI Outlook Impact Forecasts
Jefferies analysts cited the decline in iPhone sales, a broader slowdown in consumer electronics purchases, and a revised outlook for the iPhone 17/18 due to sluggish adoption and commercialization of AI as reasons for their lowered forecasts. They predict Apple will fall short of its revenue growth target of 5% for the first quarter of 2025, and the company’s guidance for the March quarter may also disappoint.
JPMorgan Cautious Despite Overweight Rating
In a separate analysis, JPMorgan maintained an overweight call on Apple but lowered their price target from $265 to $260 due to concerns about the company’s outlook.
Their concerns included the impact of the strong dollar on demand for Apple products, limited sales growth with the current AI features, and weak demand in China. JPMorgan analysts believe Apple will continue to lose market share in China, as the company has passed its product cycle peak and its premium phones do not qualify for local government subsidies offered for lower- to mid-tier phones.
Shrinking Market Share in China, Falling Stock Price
Apple’s market share in China took a significant hit last year, losing its top spot as the country’s largest smartphone seller, according to Canalys. This decline can be attributed to the absence of Apple’s latest AI features in its Chinese iPhones.
Reflecting these challenges, Apple’s stock has seen a sharp decline, losing almost 12% in 2025 as of Tuesday. The stock closed at around $222.40, a drop of approximately 3.5% on the day.
