By Apple (Ticker: AAPL) stock experienced another decline on Friday, marking its sixth consecutive day of losses. The stock closed 1.5% lower at $172.88. This downward trend represents the longest losing streak since January 2022, as reported by Dow Jones Market Data.
Concerns Over Global iPhone Demand
There are several factors contributing to the recent decrease in Apple’s stock. Notably, multiple Wall Street analysts have expressed concerns regarding global iPhone demand.
According to Evercore ISI analyst Amit Daryanani, the demand for different models of the iPhone 15 is currently mixed. He stated in a research note on Friday that “the data points continue to point to stable demand for the iPhone 15 Pro and Pro Max models compared to the previous year across most geographies.” However, Daryanani also mentioned that “the lower-end models’ lead times saw significant contractions this week.” Despite this, he maintains an optimistic outlook on the stock and rates it as Outperform, setting a $210 price target.
Similarly, UBS analyst David Vogt, who rates Apple as Neutral with a $190 price target, observed that wait times for the iPhone 15 Pro model have decreased by an average of five days compared to last year. This information is based on UBS Evidence Lab data, which tracks iPhone availability across 30 countries.
In conclusion, concerns about global iPhone demand have contributed to Apple’s stock decline. However, analysts remain hopeful about the company’s performance, particularly with regards to the higher-end models of the iPhone 15 series.
While the holiday season and Singles’ Day in China may drive smartphone demand, the growth potential for iPhones seems limited in the face of the overall macro environment and the fierce competition from Huawei’s Mate60 in China, according to Vogt’s analysis. Apple has not yet responded to requests for comment.
For Apple, sales of the iPhone are vital as they contributed a staggering $205.5 billion out of the company’s total revenue of $394.3 billion in 2022. In the third quarter, which ended on July 1, revenue from product sales experienced a 4% decline compared to the previous year. Apple attributed this decline to foreign-exchange rates and an uncertain economic climate.
The rise in bond yields has also negatively impacted growth stocks, especially within the tech sector, as it diminishes the present discounted value of future earnings. The yield on the 10-year Treasury note has risen by 1.2 percentage points since July, reaching close to 5% recently. Consequently, this has affected not only Apple but also other companies heavily rooted in technology. The tech-heavy Nasdaq Composite faced a decline similar to Apple’s stock performance this week.
Looking ahead, Apple will release its fourth-quarter earnings report on November 2. Investors eagerly await insights from management on the state of iPhone demand.
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