Struck by a resurgent competitor in China's Huawei and a tepid response to its iPhone 15, Apple's star has been on the wane, with the US-based firm seeing a wipeout of $90 billion off its market cap in a recent dropdown in market shares.
Apple hit seven-week low on Wednesday after Barclays' rare downgrade on demand concerns, according to Reuters.
On Nasdaq, the shares of Apple traded at $187.24, down by 2.75 per cent after opening the day at $187.15. Barclays is the second brokerage to have the equivalent of a "sell" rating on Apple's stock, Reuters said.
Since early last year, the Cupertino-based technology giant has been grappling with a demand slowdown, with its performance in China being worrisome following the revival of local competitor Huawei.
According to Tech Wire Asia, Huawei secured a 12.9 per cent market share in China in Q3, experiencing an impressive 37 per cent Year-on-Year growth.
Apple, ranking third, has a 10.6 per cent market share with 10.6 million shipments. Honor leads with an 18 per cent market share and 11.8 million shipments, while OPPO (including OnePlus) holds the second spot with 10.9 million shipments.
Overall smartphone shipments in Mainland China fell 5 per cent to 66.7 million units.
The UK-based Barclays recently slashed tech giant's rating to "underweight," accompanied by a reduction in its price target by approximately one dollar. The decision was attributed to weaker demand for the recently launched iPhone 15.
Tim Long, the analyst behind the downgrade, expressed pessimism about the current and future iPhone models, stating, "Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling."
The lack of excitement surrounding the iPhone 15 is expected to persist with the upcoming iPhone 16, contributing to the long-standing bearish views of Apple's fortune.
Despite the modest one-dollar change in the price target, the market's reaction appear more pronounced, reflecting broader concerns about Apple's performance.
The past 12 months have witnessed a consistent narrative for Apple, marked by declining demand, lower profits, and revenues.
The market's response suggests a heightened scrutiny of Apple's valuations, especially considering its substantial 50 per cent increase in shares in 2023.
Long suggests that the stock's resistance to concerns may wane, potentially leading to downward pressure on shares in the short term as 2024 begins with strong apprehensions.
"The iPhone 15 has been lackluster, and we believe iPhone 16 should be the same," said the Barclays analyst.
Barclays has also warned of risks for Apple's services business, currently under scanner in countries including the US.
According to the global financial markets infrastructure and data provider LSEG, Long is rated four out of five stars for his recommendation accuracy on Apple stock.
As of now, Apple's market cap stands at $2.91 trillion. The shares drop is likely to erase about $90 billion from the company's market cap.
The stock accounting for 7 per cent of S&P 500's weight had surged nearly 50 per cent last year and hit a record-high in December.
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