On Tuesday, the first trading day after U.S. President Trump took office, U.S. stocks generally rose, but Apple bucked the trend and fell, with an intraday drop of 4.6%. Apple was downgraded by two Wall Street analysts and lowered its target price by one analyst. In addition, data showed that Apple's iPhone sales in China fell 18.2% year-on-year in the fourth quarter.
Jefferies and LoopCapital both downgraded Apple, with Jefferies becoming the rare Wall Street institution to give Apple the equivalent of a sell rating. Although JPMorgan Chase did not downgrade Apple, it lowered its target price. Other data show that Apple’s iPhone sales in China fell by 18.2% year-on-year in the fourth quarter. In addition, the latest disclosure shows that the "Capitol Hill stock god" sold Apple on a large scale. Apple loses its title as the world's largest company by market capitalization.
Jefferies downgraded Apple's rating to underperform, becoming a rare Wall Street institution to give Apple the equivalent of a sell rating. Only 8.5% of analysts gave it a bearish rating, and about 63% gave it the equivalent of a buy rating. Jefferies also lowered its price target on Apple to $200.75 from $211.84.
LoopCapital downgraded Apple to Hold from a Buy rating with a price target of $230.
While analysts at JPMorgan maintained their overweight rating on Apple, they lowered their target price to $260 from $265, citing caution about the company's prospects.
Jefferies analysts led by Edison Lee noted:
In the world's largest mobile phone market, iPhone sales are underperforming and have not been driven by artificial intelligence hype. The company's revenue in the first quarter of 2025 is unlikely to meet expectations and may not meet the 5% operating income growth forecast for the first quarter of 2025. Apple's guidance for the March quarter may also disappoint.
Lee also lowered his iPhone 17/18 expectations due to the slowdown in the popularity and commercialization of artificial intelligence, adding that Apple's artificial intelligence prospects appear to be bleak.
Analysts also pointed to weaker-than-expected sales of iPhones and consumer electronics in general.
Issues that JPMorgan analysts are concerned about include:
The dollar strengthened while demand for Apple products was limited.
Given the current AI capabilities, sales of Apple products are flat.
Chinese demand is weak. They predict that Apple will continue to lose market share in China because the company has passed the peak of its product cycle and because Apple's high-end phone models cannot benefit from local government subsidies for mid- and low-end phones.
According to the latest data from Counterpoint, China’s smartphone sales fell by 3.2% year-on-year in the fourth quarter of 2024, becoming the only quarter in 2024 to experience a year-on-year decline. In the fourth quarter, Huawei topped the market share list, followed by Xiaomi and Apple. Faced with fierce competition from the expansion of Huawei and other Chinese mobile phone brand manufacturers in the high-end market, Apple ranked third in the fourth quarter of 2024, with a market share of 17.1%. Apple's iPhone sales in China fell 18.2% year-on-year in the fourth quarter.
According to data released by market research company Canalys, the Indian smartphone market shipments fell by 4% in the fourth quarter of 2024 to 37.2 million units. Among them, vivo remains the leader with 7.5 million units shipped and 20% market share, followed by Xiaomi and Samsung with 5.7 million units and 5.4 million units respectively. OPPO (excluding OnePlus) and Apple ranked among the top five with 4.2 million and 4 million units respectively, with Apple entering the top five for the first time driven by active promotions and holiday demand.
On January 20, the national subsidy for mobile phones was officially launched. At present, most of Apple’s main mobile phone models can enjoy state subsidies, including iPhone15, iPhone16, etc. A consumer placed an order for an iPhone 16 with 256GB of memory through the national subsidy, priced at 5,499 yuan. Compared with the US market, the iPhone 16 after the national subsidy is the lowest price in the world and has become Apple's most "scented" model. In addition, some netizens discovered that after the national subsidy, the iPhone 13128G version only costs 2,999 yuan, which has dropped to a historically low price. According to estimates, driven by the national subsidy policy, domestic sales of mobile phones are expected to reach 300 million units this year.
Analysts said that Apple's rating downgrade further showed that weak iPhone sales were increasingly causing concerns among investors, and that artificial intelligence (AI) had failed to play its expected role as a growth catalyst.
Earlier this month, Ming-Chi Kuo of Tianfeng International, the analyst who knows Apple best, said that Apple will face more severe challenges this year, including iPhone growth almost stagnating, AI services still not contributing, and business in China continuing to shrink. Ming-Chi Kuo believes that the market is overly optimistic and the stock price is at risk of falling. When Ming-Chi Kuo stated that he was bearish on Apple, Apple's stock price was at the $236 level.
As of Tuesday's close, Apple fell 3.2% to close at $222.64. Since 2025, Apple's stock price has fallen by 11%. On Tuesday, Apple's market value was surpassed by Nvidia, losing its title as the world's largest company by market value.
There is no good news from the "Capitol Hill Stock God" either. Pelosi has recently been heavily trading the stocks of U.S. technology giants, buying call options on Google and Amazon, but selling Apple and Nvidia. On the last trading day of 2024, 31,600 shares of Apple common stock were sold, with a transaction value ranging from $5 million to $25 million. This was also her largest transaction in the past month.
In addition, the battery of the Apple foldable machine will be made of all-steel casing, and the number will be two. Apple's foldable screen phone will be launched in the third quarter of 2026. At present, supply chains in mainland China and Taiwan have begun to make preliminary preparations.
Apple will announce its earnings next Thursday, January 30, after the U.S. stock market closes.