Days after Barclays also cut its rating, Apple is the only megacap tech stock in the red, down 0.9% in premarket trading, after brokerage Piper Sandler downgraded the company to “neutral” from “overweight.”
Patrick Seitz for Investor’s Business Daily:
For the second time this week, a Wall Street analyst has downgraded Apple stock. Investment bank Piper Sandler on Thursday lowered its rating on the iPhone maker to neutral from overweight, or buy.
Kumar said he moved to the sidelines on Apple stock because of concerns about soft smartphone sales and macroeconomic weakness in the first half of the year.
Kumar lowered his price target on Apple stock to $205 from $220.
In premarket trades on the stock market today, Apple stock sank 0.9% to $182.68.
MacDailyNews Take: This dip is setting up nicely for those with cash on hand to accumulate.
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While I support MDN optimism every time this subject comes up, wondering if this time will be different as most companies peak at some point. Hopefully not Apple and holding on to my stock for now. Some recent news headlines and reports quoted:
“In every quarter of the past fiscal year, Apple has reported a decline in sales”
“Apple has lost some $370 billion in market value so far in 2024”
“Worries over weak iPhone 15 demand and regulatory scrutiny should be tempered for Apple”
“Is 2024 the year Apple’s crippling dependence on China finally blows up?”
“Apple needs to get ‘unstuck’ on innovation to improve growth”
The latter quote is the most worrisome. As Cook does nothing different since taking over in 2011 protecting the iPhone cash cow, now waning in sales and Apple multiple downgrades — practically NOTHING to introduce game changing tech profit products.
Sure the glasses are best in class. But in this economy and global uncertainty, I don’t see the average Joe rushing to plunk down $3,500 to wear the device for more than an hour.
Sure the watch is best in class with its own copyright problems, but thank you Steve for innovative tech.
The M3 chips are absolutely outstanding. But have you noticed most speed comparisons compare older M chips and Intel chips in Macs. Reason being, the fastest computer chips are still made by other manufacturers for computers that allow crucial upgrades at reasonable prices.
No one thinks of Apple for gaming dominance and why the world’s first 3 Trillion company cannot BLOW OUT the competition in this category is a mystery since the famous Mac ad Super Bowl Sunday in the third quarter 1984.
Which brings me to my broken record point: Tim Cook needs to retire and the fat executives and board need to get off their asses, put down the umbrella drink to FIND a creative genius to LEAD APPLE FORWARD. If the revolving door of executive departures and creative talent starting with Jony Ive does not concern you, well… relax and take another toke…
I agree with everything you wrote, except for your opinion of Tim Cook and Apple’s supposed lack of creativity. No doubt, Tim Cook isn’t Steve Jobs when it comes to personal creativity and enigma. But Steve Jobs wasn’t Tim Cook either – I highly doubt AAPL would be the $3T company it is today if Steve was at the helm. But that’s neither here nor there – back to the current AAPL and its current conundrums:
It’s no secret the smartphone market has matured and while the high end has withstood the macroeconomic headwinds so far, the folks that can afford high end phones won’t upgrade as frequently if they don’t see enough new ‘bling’ (aka ‘features’ in the tech world) to show off to their friends. But what else to put into these rectangular blobs that isn’t already there? Predictably, Apple has been hyping its camera improvements and with nothing more than increased optical zoom to offer there, is moving to the screen which is now predictably increasing in size – the only display improvement people care about.
Apple has been able to keep iPhone sales afloat better than the competition due to, in no small part, the Apple Watch. It’s utility as a health and exercise companion has proved super successful – and it’s tight integration with the iPhone guarantees that at least some folks who want an Apple Watch will move to iPhone for the best experience. But now the Apple Watch is in a bit of trouble with the intellectual property theft behind the blood oxygen sensor. And even without that obstacle, what other improvements are there in its future to help drive growth/interest? Blood pressure and glucose monitoring are often cited – but they’ve proven to be harder to implement than anyone thought.
Than there’s the disaster-in-the-making called the Vision Pro. Back in 2018 or 2019, Tim Cook proclaimed that Apple is going full steam ahead with an AR product as he saw it as the new ‘iPhone’ level device. And what did we bet 5 years later? A $3500 VR headset that nobody can (battery runs out) or want (who’d want to look like a complete dork in public or even with friends?) to use for any length of time. The technical accomplishment of the device is amazing, don’t get me wrong. But it’s a niche product that will never sell in the millions. For Apple to have an iPhone equivalent product on its hands, it needs to develop those AR glasses. I do blame Tim Cook for this misstep – Steve Jobs would have never even bothered developing the Vision Pro as it stands.
In the end, I think Apple isn’t in a great spot right now. There are no great growth drivers on the short term horizon, iPhone sales growth is near standstill and at risk of declining if China’a economic woes continue and/or its government continues to increase iPhone sales restrictions. I am currently out of AAPL and won’t add it back into my portfolio until I see some growth drivers and/or the stock price gets down into the $160 range.
not a bad synopsis of concern.
HOWEVER, you’re wrong about the VR headset.
“But it’s a niche product that will never sell in the millions.”
That’s how innovation works. It starts with something that is too expensive, too niche, too forward-thinking, and evolves into a mass market product at a cheaper price.
Honestly, they’d sell out at a higher price.
it’s a shot across the bow, a harbinger of the future, a preview of what will eventually be more affordable and mass-consumed.
Reminiscent of early Macs….
The tech industry continues to move faster each year. The question is how quickly will prices come down to sell in significant quantities before other companies catch up with at least the ‘good enough’ competition. For all we know the Vision Pro may just become the next Betamax.
Thank you for a thoughtful and detailed reply, Tom.
I have to disagree somewhat on Tim Cook. Yes, his deals with China using cheap labor (slave?) capitulated Apple to the world’s first 3 Trillion dollar company taking advantage of NAFTA signed by young girls loving Bill Clinton. He IGNORES the human right abuses in China and allows the communists to censor company at every whim.
The downside to Apple’s wealth is moving manufacturing OUT of California and the United States, for obscene profits which is just WRONG in my view.
Yes, iPhones are made study and built to last and if you’re not a drooling camera feature geek with deep pockets, the upgrade time will be extended much longer as it should be. Cut down on e-waste, a good thing.
Your comprehensive constructive criticism of the Vision Pro is SPOT ON, well done. I don’t se how in the world it will achieve iPhone status and sales…puhleeze.
“In the end, I think Apple isn’t in a great spot right now. There are no great growth drivers on the short term horizon, iPhone sales growth is near standstill and at risk of declining if China’a economic woes continue and/or its government continues to increase iPhone sales restrictions.”
Perfectly stated and where Apple is headed…
You’re very ‘short-sighted’ about the Vision Pro. It hasn’t even been released yet and you’re calling it a disaster and a misstep, that’s clueless. The same BS was said about the AirPods, “you’ll look like a dork!” What is this, 3rd grade? Nobody cared and everybody who could afford AirPods bought them.
The Vision Pro isn’t for walking around in public or hanging out with friends, where do you even come up with this stuff? They will sell every single unit they can make this year and next, once they release a $1500-2000 model it will sell in the TENS of millions and hundreds of millions by the end of the decade. It may not replace the iPhone or Mac just yet but it will be the must-have Apple accessory after the Watch.
2024 will be an exciting year for Apple. The Vision Pro will be an instant sell-out and generate lots of buzz, for stockholders year-over-year comps will be easier, GPT-like AI will be the star of the show at WWDC for both Siri and Xcode, and more.