Apple Stock Retreats From Record Even As Analysts Hype Up AI-Driven iPhone Super-cycle: Retail Mood Subdued
By Stocktwits Inc | First Published Dec 19, 2024, 7:51 PM ISTDaiwa analyst Louis Miscioscia said he remains positive as Apple emerges as the leader in the artificial intelligence phone category.
Apple, Inc. ($AAPL) shares pulled back from record highs on Wednesday as traders reacted to a mixed bag of catalysts. The upcoming holiday season is key for the stock as it trades with a nearly 30% yearly gain.
Unlike some of its big tech peers, Apple's stock trajectory this year was uneven. After a forgettable first half, the stock took off after the company announced a massive $110 billion buyback in early May.
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The upward momentum was sustained till mid-July, and a period of consolidation followed. The announcement of Apple Intelligence-enabled iPhones in early September did little to rev up sentiment as the market reacted to the phased launch of the new features.
The presidential election provided a thrust to the stock in early November, pushing it to new highs.
The stock came under pressure on Wednesday after Bloomberg’s Mark Gurman said the company shelved its plan for a hardware subscription plan for its iPhone, citing regulatory and software issues.
On a positive note, Daiwa Capital Markets analyst Louis Miscioscia maintained an ‘Outperform’ rating and increased the price target for the stock from $255 to $275, suggesting scope for about 11% upside potential.
The analyst said he remains positive as the company emerges as the leader in the artificial intelligence (AI) phone category. “This will bode well as we expect consumers to shift to higher-end phones now and a likely AI iPhone cycle in 2025,” he added.
Earlier this month, the tech giant released the newest iterations of its operating systems across its hardware products, bringing new “Apple Intelligence” features to these devices in the U.S. These features will be made available in other regions over the next year.
A Reuters report said on Thursday that Apple was in talks with Tencent Holdings Limited ($TCEHY) and TikTok parent ByteDance to integrate Apple Intelligence into the iPhones sold in China.
That said, valuation remains a concern, with the year’s gain in line with the broader tech sector. In a post on X, Charlie Bilello, Chief Market Strategist at Creative Planning Investor, underlined Apple’s stretched valuation. The stock now trades at 41 times earnings, the highest P/E ratio since 2007 when the first iPhone was launched, he said.
But bullish analysts such as Wedbush’s Daniel Ives think otherwise. The analyst sees the materialization of an AI-driven iPhone super-cycle that will lead to record iPhone sales of over 240 million in the fiscal year 2025.
On Stocktwits, retail sentiment toward Apple stock was ‘neutral’ (51/100) but retail chatter has been incessant, typical of high-profile stock such as Apple.
A platform user raised concerns about the sensitivity of Apple to macro indicators.
https://stocktwits.com/Sleepymoneys/message/597144416
In premarket trading, Apple was edging up 0.10% to $248.231 as of 8:23 a.m. ET.
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