Apple Inc (NASDAQ:AAPL, ETR:APC) has been hit with another rating downgrade a mere day after Barclays PLC (LSE:LON:BARC) sent tech stocks into a tizzy by reducing the world’s most valuable company to a sell.
This time, Apple was on Piper Sandler & Co’s chopping block, for largely the same reasons.
Echoing Barclays’ sentiment, Piper Sandler analyst Harsh Kumar cut Apple stock to neutral due to limp Chinese iPhone demand.
“We are concerned about handset inventories,” Kumar said, adding that “growth rates have peaked for unit sales”.
Apple emerged as an outlier among the Magnificent 7 tech stocks in 2023, having underperformed against the likes of Microsoft Corporation (NASDAQ:MSFT), Nvidia Corporation (NASDAQ:NVDA) and Meta Platforms Inc (NASDAQ:FB) in 2023, and it seems like analysts are less than bullish in the year ahead.
Apple shares (NASDAQ:AAPL) still rallied over 40% throughout the year, but this was far below the triple-digit gains netted by other megacap tech stocks on the back of bumper artificial intelligence premiums.
For instance, long-term rival Microsoft Corporation vastly outperformed Apple as the Redmond-based tech titan steered to the forefront of the AI zeitgeist due to its close partnership with ChatGPT creator OpenAI.
Conversely, Apple has kept its focus on high-end consumer hardware, with research and development efforts concentrated on the soon-to-be-released Apple Vision Pro augmented reality headset.
But this focus on clunky, expensive hardware comes at a time of reduced discretionary spending as inflation-hit customers keep a tight lid on their wallets.
Apple shares were knocked another 1.2% lower in pre-market trades on Thursday.
Though it still remains the world’s most valuable company with a $2.87 trillion market capitalisation, Microsoft has significantly closed the gap with a $2.75 trillion market cap.