Insightful Word
  • Investing
  • Stock
  • Economy
  • Politics
  • Investing
  • Stock
  • Economy
  • Politics
No Result
View All Result
Insightful Word
No Result
View All Result
Home Investing

Needham downgrades Apple on weak iPhone cycle, AI lag and overvaluation concerns; share falls

admin by admin
June 4, 2025
in Investing
0
Needham downgrades Apple on weak iPhone cycle, AI lag and overvaluation concerns; share falls
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

Apple Inc. extended its slide in early trading on Wednesday, after investment firm Needham became the latest to downgrade the stock, citing intensifying concerns over the company’s growth trajectory, position in the artificial intelligence race, and geopolitical headwinds.

Shares of the iPhone maker fell 0.6% in premarket trading.

The stock has now dropped 19% in 2025, making it the worst-performing member of the so-called Magnificent Seven—a group of tech giants that includes Microsoft, Amazon, Nvidia, Meta, Alphabet, and Tesla.

Needham downgraded Apple to hold from buy, with analyst Laura Martin pointing to “expensive” valuations and a worrying lack of innovation in generative AI.

She noted that Apple’s hardware ecosystem could be increasingly vulnerable as rivals pursue new form factors powered by AI.

“For this stock to work, it must have the catalyst of an iPhone replacement cycle, which we do not foresee in the next 12 months,” Martin wrote, adding that innovations with generative artificial intelligence — an area where Apple has been lacking — “open the door for new hardware form factors that threaten iOS devices.”

Until then, we believe that $170-$180/share is a better entry level for Apple shares.

The downgrade adds to a growing list of analysts turning cautious.

Earlier this year, Jefferies, Rosenblatt Securities, Oppenheimer, MoffettNathanson, Loop Capital, Aletheia Capital, and DBS Bank also cut their ratings or price targets on Apple.

As of now, less than 60% of Bloomberg-tracked analysts recommend buying the stock—a stark contrast to Microsoft or Nvidia, where the buy ratio exceeds 90%.

AI and competition drive long-term concerns

Martin warned that Apple’s relative lack of native AI capabilities is beginning to erode its competitive edge.

Rivals such as Meta and Google-parent Alphabet are already experimenting with AI-powered devices like smart glasses, which could eventually threaten the primacy of smartphones.

“Because Apple has a 15%-30% take rate of revs [revenue] earned on its hardware, every Big Tech company is building platforms designed to displace Apple’s integrated hardware and software products in a GenAI world,” Martin wrote.

Further highlighting the growing competitive pressure, OpenAI recently acquired io, a startup co-founded by former Apple design chief Jony Ive, signalling a push into next-generation device ecosystems that could bypass Apple’s current hardware structure.

Despite achieving 5% revenue growth in its most recent quarter, Apple continues to lag its tech peers.

Amazon, Alphabet, and Meta have all posted double-digit growth, fuelled by strong demand for cloud services, advertising, and AI innovation.

Counterpoint slashes 2025 global smartphone shipment

Separately, research firm Counterpoint revised down its 2025 global smartphone shipment growth forecast to 1.9%, from 4.2% previously.

The downgrade was driven by “renewed uncertainties surrounding US tariffs” and weakening demand in key regions including North America, Europe, and Asia.

For Apple, the firm now expects 2.5% shipment growth this year, down from a previous estimate of 4%.

Samsung’s shipment outlook was cut to zero growth, from an earlier projection of 1.7%.

While smartphones were temporarily excluded from US President Donald Trump’s new round of tariffs in April, uncertainty continues to cast a shadow.

Apple, which manufactures 90% of its iPhones in China, has been shifting more production to India in a bid to diversify.

However, that too has invited scrutiny.

Last month, Trump criticized Apple’s growing reliance on India, stating he prefers the company to manufacture iPhones in the United States.

Though Apple has significantly ramped up shipments from its Indian facilities, the threat of shifting trade policy remains a lingering risk.

“All eyes are on Apple and Samsung because of their exposure to the US market,” said Liz Lee, Associate Director at Counterpoint Research.

“Although tariffs have played a role in our forecast revisions, we are also factoring in weakened demand.”

The post Needham downgrades Apple on weak iPhone cycle, AI lag and overvaluation concerns; share falls appeared first on Invezz

Previous Post

From ‘burning platform’ to 600% surge: inside Rolls-Royce CEO’s ‘Four Pillar’ miracle turnaround

Next Post

SCHD ETF forecast for June and top catalysts to watch

admin

admin

Next Post
SCHD ETF forecast for June and top catalysts to watch

SCHD ETF forecast for June and top catalysts to watch

Trending News

ASML stock forecast: will the Dutch semiconductor giant’s growth trajectory shift in 2025?

ASML stock forecast: will the Dutch semiconductor giant’s growth trajectory shift in 2025?

January 2, 2025
Boyaa Interactive surpasses Metaplanet to become Asia’s largest BTC holder

Boyaa Interactive surpasses Metaplanet to become Asia’s largest BTC holder

December 2, 2024
European markets open: Stoxx 600 gains 0.3%; focus on US steel tariffs

European markets open: Stoxx 600 gains 0.3%; focus on US steel tariffs

June 4, 2025
Subscribe to Insightful Word


    Recent News

    ARB eyes recovery as Arbitrum taps agentic DeFi revolution with $1M grant

    ARB eyes recovery as Arbitrum taps agentic DeFi revolution with $1M grant

    June 5, 2025
    Ripple releases $2.18B in XRP, price dips 2%

    Ripple releases $2.18B in XRP, price dips 2%

    June 5, 2025
    Nintendo Switch 2 launch sees shortages as 2.2M vie for units in Japan

    Nintendo Switch 2 launch sees shortages as 2.2M vie for units in Japan

    June 5, 2025
    Why Bank of America sees 13% upside on Roblox (RBLX)

    Why Bank of America sees 13% upside on Roblox (RBLX)

    June 5, 2025

    Recent News

    ARB eyes recovery as Arbitrum taps agentic DeFi revolution with $1M grant

    ARB eyes recovery as Arbitrum taps agentic DeFi revolution with $1M grant

    June 5, 2025
    Ripple releases $2.18B in XRP, price dips 2%

    Ripple releases $2.18B in XRP, price dips 2%

    June 5, 2025

    Latest News

    • ARB eyes recovery as Arbitrum taps agentic DeFi revolution with $1M grant
    • Ripple releases $2.18B in XRP, price dips 2%
    • Nintendo Switch 2 launch sees shortages as 2.2M vie for units in Japan

    About Insightful Word

    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools
    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools

    Copyright © 2025 Insightfulword.com. All Rights Reserved.

    No Result
    View All Result
    • Investing
    • Stock
    • Economy
    • Politics

    Copyright © 2025 Insightfulword.com. All Rights Reserved.