Once Wall Street’s darling, Apple’s stock just took a big hit.
Bank of America (BofA) cut the rating of the country’s most valuable company to “neutral” from “buy” yesterday (Sept. 29), shaving billions off its market cap.
Apple’s stock is still outperforming. Apple’s stock is worth 20% less than it was at the end of 2021, but the Nasdaq is down 31% in the same period. But that’s not enough to convince analysts to stay optimistic.
“We see risk to this outperformance over the next year,” BofA analyst Wamsi Mohan wrote in a note to clients, citing weaker consumer demand. “Services already in slowdown and we expect products to follow.”
4.9%: how much Apple’s share price dropped after BofA’s downgrade on Sept. 29
$160: BofA’s revised price target per share, down from $185
$120 billion: how much Apple’s market cap lost in that one day
This week, Apple reportedly scrapped plans to produce 6 million more iPhone 14s in the second half of the year.
The basic version of the new model is not much different from the iPhone 13. The iPhone 14's Pro and Pro Max versions are selling faster than the base model—usually the best seller—but even these premium versions aren’t a massive deviation from their predecessors, because of the company’s conservatism and risk aversion.
In China, one of Apple’s most important market, demand for the iPhone 14 has also been sluggish. Analysts noted sales expectations based on pre-order levels ultimately disappointed.
As Apple took a sizeable hit, shares of several other prominent American tech companies fell, too.
Even beyond the bourses and stores, all is not well at Apple. Its management is in flux. In the last couple of days alone, a 67-year-old director in Apple’s Intellectual Property Enforcement has sued the company for ageism, and Tony Blevins, its vice president of procurement, is leaving after making an off-color about fondling “big-breasted women” for a living in a viral TikTok video.