Apple Faces Stock Decline as Barclays Downgrades Amid iPhone 15 Sales Concerns
On the first trading day of the new year, Apple witnessed a decline in its stock value, exerting downward pressure on the overall US stock market and interrupting the formidable 2023 rally of Big Tech.
Shares of the tech giant dropped by 3.6% on Tuesday following a downgrade from Barclays, shifting the stock’s rating to “underweight” from “equal weight.” The downgrade was prompted by Barclays citing disappointing sales of the iPhone 15, particularly in the crucial Chinese market. The financial institution also adjusted its price target down to $160 from $161.
Analysts from Barclays expressed concerns in a note, stating, “We are still picking up weakness on iPhone volumes and mix, as well as a lack of bounce-back in Macs, iPads, and wearables. The continued period of weak results coupled with multiple expansion is not sustainable.”
The downgrade is a result of softened demand for the latest iPhone iteration, with customers showing less inclination to upgrade due to limited new features. The upcoming iPhone 16, expected later this year, is anticipated to bring only incremental upgrades, further contributing to the current market sentiment.
In addition to concerns about iPhone sales, Barclays also indicated a potential softening in Apple’s services business, which encompasses Apple TV+ and Apple Music. This projection is influenced, in part, by increased regulatory scrutiny affecting the services sector.
The recent developments come after a challenging period for Apple, marked by the temporary withdrawal of its most advanced Apple Watch models from the US market. This move was prompted by a ruling from the US International Trade Commission, threatening to ban imports of the devices due to a patent violation registered to another company. Apple has since resumed sales of the Apple Watches following a federal appeals court’s intervention, blocking the import ban.
The combination of these factors has impacted Apple’s stock performance, highlighting the challenges the tech giant faces in maintaining its momentum and growth in an evolving market landscape.
