Apple Downgraded to ‘Sell’ Due To Weak Hardware Demand Outlook: Retail Sentiment Plummets As Stock Hits 2-Month Low

Apple, Inc. (AAPL) stock pulled back sharply in Tuesday’s premarket after another sell-side firm issued a bleak commentary regarding the company’s forward outlook, sending retail sentiment further into bearish territory. 

The stock traded down 2.18% at $224.97 as of 7:04 a.m. ET, and if the premarket losses are carried over to the regular session, it could open at its lowest level in two months.

Jefferies analyst Edison Lee downgraded Apple stock to ‘Underperform’ from ‘Hold’  and lowered the price target to $200.75 from $211.84, TheFly reported. The updated price target implies a downside potential of 11.52% from current levels. 

Lee attributed his muted expectations to weak iPhone sales and a lackluster consumer electronics market. He reduced his iPhone 17 and 18 estimates, citing slower artificial intelligence (AI) uptake and commercialization.

The analyst expects Apple’s December quarter revenue growth to miss the 5% guidance. He added that the company will likely guide to a below-consensus low-single-digit revenue growth for the March quarter.

Jefferies said Apple’s AI outlook is subdued. The firm also noted that its industry checks pointed to a potential delay in the iPhone's advanced packaging roadmap.

Apple ended 2024 with a substantial gain of 31%, outperforming the broader market, primarily due to optimism that the rollout of the Apple Intelligence features in the U.S. in December and the likelihood of their global launch through the first half of 2025 with kickstart an iPhone Supercycle.

Wedbush analyst Daniel Ives, an Apple bull, predicts record iPhone sales of over 240 million units in 2025. He has a Street-high price target of $325 for the stock.

But not all sell-side analysts share his optimism. Earlier this month, a Barclays analyst maintained an ‘Underweight’ rating and a $184 price target. The analyst highlighted weaker-than-expected iPhone demand and increased regulatory risks as pushbacks.

AAPL sentiment and message volume January 21, 2025, premarket as of 7:04 am ET | Source: Stocktwits

On Stocktwits, sentiment toward Apple stock turned to 'extremely bearish’ (20/100), the lowest in over a year, from the 'bearish' mood that prevailed a day ago, but message volume improved slightly to ‘normal.’

Some retailers on the Stocktwits platform are geared for a break below $200 following the earnings report. The company is scheduled to release its fiscal year 2025 first-quarter earnings report after the market closes on Jan. 30.

Another warned fellow retail investors to stay away from Apple stock, attributing the opinion to a lack of innovation, waning influence in China, conflicts with the Trump administration and lack of compelling AI and robotics offerings, among other things.

Apple is among the top five trending tickers on Stocktwits early Tuesday.

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