What Happened?
Shares of iPhone and iPad maker Apple (NASDAQ:AAPL) fell 4.1% in the morning session after Jefferies analyst Edison Lee downgraded the stock's rating from Hold to Sell, and echoed concerns about weak iPhone sales. Lee expects AAPL to report Q1'2025 revenue below consensus estimates when it officially reports earnings later in the month. Similarly, Loop Capital downgraded shares of the iPhone maker from Buy to Hold, adding "Downgrading to Hold With Material Demand Reductions Ahead of iPhone 17." Overall, the weak sentiment highlights growing concerns about Apple's sales strength and dominance in the smartphone market.
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What The Market Is Telling Us
Apple’s shares are quite volatile and have had 17 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 3.2% on the news that data from research firm Canalys revealed the company (AAPL) is losing dominance in China. The data revealed that iPhone shipments in China fell 17% to 42.9 million units in 2024, pushing Apple down to third place in market share. The decline was partly blamed on the lack of artificial intelligence features in new iPhones. This weak print is significant for Apple since China accounted for roughly 17% of its total sales in fiscal year 2024.
Apple is down 9.6% since the beginning of the year, and at $220.33 per share, it is trading 14.9% below its 52-week high of $259.02 from December 2024. Investors who bought $1,000 worth of Apple’s shares 5 years ago would now be looking at an investment worth $2,784.
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