Apple got snubbed by Goldman Sachs and fell behind Microsoft after a turbulent week

Goldman swapped Apple and pharmaceutical companies Merck $MRK and Vertex for biotech giant Amgen $AMGN, crushed-stone producer Vulcan Materials, and software firm Monday.com.

Apple stock fell as much as 2% following the snub, and its market cap fell behind Microsoft $MSFT by $314 billion during Friday trading. That’s the largest gain Microsoft has had on Apple since 2003, according to Dow Jones Market Data reviewed by MarketWatch.

Apple has had a rough start to 2024. Even after its first quarter (ended Dec. 31) revenues beat analyst expectations, the tech giant’s stock fell as concerns loomed that it’s losing ground in China, and that demand for its Vision Pro mixed-reality headsets and iPhone 15 won’t hold.

Apple shuttered its electric vehicle project this week just as its Chinese rival Huawei charged ahead. At the same time, some Vision Pro customers reported confusion using Apple’s spacial computing headsets and returned them. Even more customers returned its Finewoven iPhone 15 cases — so many that Amazon $AMZN even put a warning label on the product.

Apple stock is down almost 7% year-to-date.

Meanwhile, several of its so-called “Magnificent 7” tech rivals are thriving. Microsoft, Nvidia $NVDA, and Meta $META have continued their huge stock rallies from last year, and Amazon is up 17% year-to-date.

Apple, Tesla $TSLA, and Alphabet $GOOGL, on the other hand, have floundered.

Notably, Goldman Sachs still rates Apple stock as a “buy,” and even raised its price target for the shares from $223 to $232 (much higher than the current price of $179 per share).

Mike Ng of Goldman notes that “the market’s focus on slower product revenue growth masks the strength of the Apple ecosystem,” and that its new product innovation and growth in services “more than [offset] cyclical headwinds.” Among its service offerings, Apple recently introduced a dedicated sports app.