Apple Stocks Hit Seven-Week Low as Barclays Downgrades Amid Concerns of Lingering Demand Slump

Apple Stocks Hit Seven-Week Low as Barclays Downgrades Amid Concerns of Lingering Demand Slump

In a significant market development, Apple Inc. (AAPL.O) witnessed a nearly 3.6% decline to reach a seven-week low on Tuesday, following a downgrade by Barclays. The world’s most valuable company has been concerned about weak demand for its devices, including the iPhone and Mac, throughout 2024.

Barclays’ recent downgrade marks the second instance of a “sell” rating on Apple stocks, contributing to the highest number of bearish recommendations in at least two years, according to data from the London Stock Exchange Group (LSEG). Apple holds a substantial 7% of the S&P 500’s (.SPX) market weight, and the broader index experienced a 0.56% decline on Tuesday. Notably, Apple had enjoyed nearly a 50% surge in 2023, reaching a record high in mid-December, primarily driven by the strong performance of Big Tech in the markets.

The Cupertino-based tech giant has faced challenges associated with a demand slowdown since early 2023, coupled with a holiday-quarter sales forecast below Wall Street estimates. Concerns about Apple’s performance in China, particularly due to resurgent local competitor Huawei, have also contributed to market apprehensions.

Barclays analyst Tim Long expressed reservations about the iPhone 15, describing its performance as lackluster, and anticipates a similar trend for the upcoming iPhone 16. Citing weaknesses in China and subdued demand in developed markets, Long downgraded the stock to “underweight” from “neutral.” He also trimmed the 12-month price target by $1 to $160. Long holds a four-star accuracy rating for his Apple-related recommendations, according to LSEG data.

Barclays additionally highlighted growing risks for Apple’s services business, which has come under scrutiny in various countries, including the United States, regarding app store practices. Despite recent challenges, the services segment has consistently outpaced growth in Apple’s hardware division, contributing nearly a quarter of the company’s total revenue.

The market reaction on Tuesday resulted in a significant erosion of over $100 billion in Apple’s market capitalization, with the stock closing at $185.64. Before Barclays’ downgrade, Itau BBA’s “sell” rating had been the sole bearish recommendation on Apple since July 2022.

Despite these challenges, analysts, on average, continue to rate Apple as a “buy,” with a median price target of $200. The company’s current valuation is approximately 28.7 times its 12-month forward earnings estimates, considerably higher than the S&P 500’s ratio of 19.8. Market participants closely monitor Apple’s strategies and performance indicators amid ongoing market uncertainties.

TechGolly editorial team led by Al Mahmud Al Mamun. He worked as an Editor-in-Chief at a world-leading professional research Magazine. Rasel Hossain and Enamul Kabir are supporting as Managing Editor. Our team is intercorporate with technologists, researchers, and technology writers. We have substantial knowledge and background in Information Technology (IT), Artificial Intelligence (AI), and Embedded Technology.

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