Apple (NASDAQ:) stock has fallen more than 12% since the start of 2024 as challenges mount on several fronts. Although it's currently trading near a five-month low, some Wall Street analysts suggest it may be a while before the iPhone maker's stock price falls. Stocks return to winning ways.
Apple Car canceled, iPhone sales slow in China
There are a number of important events that have contributed to the weak investor sentiment for Apple stock this year, and thus to the company's performance since the beginning of the year.
In late February, reports revealed that the tech giant had decided to cancel its electric vehicle project. This decision comes a decade after Apple first launched the project, and similar to the impact of the iPhone, it ended the company's ambitions to enter and potentially dominate new market segments.
Electric vehicle (EV) projects have experienced inconsistent progress throughout development and are being scrapped as falling demand causes a broader slowdown in EV investment by global automakers.
Bloomberg News, which first reported the move, said several team members working on the electric vehicle initiative will be reassigned to work within Apple's artificial intelligence (AI) division.
But perhaps the biggest factor negatively impacting investor interest in Apple stock is declining iPhone sales both globally and in China. Especially in China.
Research firm Counterpoint Research reported last month that Apple's iPhone sales in China fell 24% in the first six weeks of 2024.
The company's market share in China's smartphone sector fell to 15.7%, placing it in 4th place, a significant drop from the previous year's 2nd place with a market share of 19%.
In contrast, Huawei, Apple's main rival in China's premium smartphone market, posted an astonishing 64% increase in unit sales over the same period.
Additionally, more recent data from China shows that Apple shipped approximately 2.4 million smartphones in China in February, which was a 33% decrease compared to February 2023.
The numbers further fueled concerns about slowing demand for the world's second-largest company, whose revenue forecast for the current quarter was $6 billion below consensus expectations.
Apple stock sentiment “can't get any worse than this''
Apple faces a demand challenge that isn't likely to be easily resolved. The company is one of the few laggards among mega-cap tech stocks that continues to grow, in large part due to the ongoing expansion in the world of AI.
As a result, many companies are using Apple stock to invest in AI frontrunners like NVIDIA (NASDAQ:), Microsoft (NASDAQ:), and Meta Platform (NASDAQ:).
After consulting with investors on a business trip, an analyst at Mizuho Securities' trading desk said sentiment around AAPL “couldn't get any worse.”
“I hear some people suggesting that big guides like the one below will be released in June, but new AI services won’t be available until late 2025 at most. That makes me feel really bad,” says Anna. List said.
Earlier this week, Loop Capital analysts lowered their 12-month price target for Apple stock from $185 to $170, citing weaker demand, increased competition and stagnant iPhone average selling prices (ASPs). .
The move comes as Apple lowers its sales and earnings forecasts for 2024.
“In this context, in particular, we now expect overall AAPL revenue and EPS to decline year-on-year in 2024 for the first time since 2016,” Loop Capital analysts said.
