From Financial Modeling Prep: 2024-10-07 14:40:00

Apple (NASDAQ:AAPL) shares fell over 1% today after Jefferies downgraded the stock to Hold from Buy, setting a price target of $212.92. Concerns were raised about overly optimistic expectations for the iPhone 16 and iPhone 17 models, which make up 52% of Apple’s revenue.

Analysts highlighted Apple’s heavy reliance on iPhone sales, leading to the downgrade. Market expectations of 5%-10% unit growth for new iPhone models were deemed unrealistic due to modest upgrades and limited AI integration. Demand for the iPhone 16 is expected to be flat compared to the iPhone 15.

Jefferies noted the lack of immediate impact of AI in smartphones, estimating true AI functionality to be 2-3 years away. Current smartphones lack the necessary technology for substantial AI capabilities, making any acceleration in the replacement cycle unlikely in the near future.

Despite concerns, Apple plans to introduce the “iPhone 17 Air” in 2025, potentially driving upgrades. Jefferies remains positive about Apple’s long-term AI prospects, despite the challenges in the near term.



Read more at Financial Modeling Prep:: Apple Cut to Hold by Jefferies, Stock Down 1%