Apple receives an underperform rating due to weak iPhone shipments and AI concerns

From Nasdaq: 2025-01-25 18:32:00

Analysts at Jefferies downgraded Apple (NASDAQ: AAPL) to underperform, citing weak iPhone shipments and AI features not resonating with consumers. Revenue growth for devices was lackluster, but services revenue saw strong growth. Despite the downgrade, Apple has a strong business model with high-margin services revenue.

Jefferies expects Apple to miss revenue estimates with 5% growth in Q4 and possible disappointing Q1 guidance. The company faces challenges with its AI technology and competition in China. Apple’s stock has seen multiple expansion in recent years, but with the iPhone upgrade cycle diminishing, it may be wise to take profits.

Apple also faces risks related to the Alphabet antitrust case, which could impact revenue from Google. The impact is uncertain as the case goes through appeals. While Apple has a strong business model, investors may want to consider the potential challenges ahead. The Motley Fool recommends considering other investment options for potential high returns.



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