Apple downgrade may lead to tech wreck
Apple’s stock slide after a downgrade by Barclays may signal the tech sector’s decline Read Full Article at RT.com
Concerns surrounding the world’s most valuable company have sent shockwaves through the industry
In the wake of Barclays downgrading Apple’s stock and trimming its price target, the tech giant experienced a 4% drop in its shares on Tuesday and the slide continued on Wednesday. The downgrade, prompted by weakening iPhone 15 sales, has raised concerns among analysts and investors regarding the outlook for iPhone 16 sales and broader hardware projections.
Barclays analyst Tim Long expressed apprehensions not only about Apple’s hardware sales but also about the services business, citing regulatory scrutiny as a potential factor. Long anticipates that regulatory challenges could lead to a deceleration in the growth of Apple’s lucrative services segment. Despite Apple CEO Tim Cook highlighting “better-than-expected” growth in the services unit during a previous investor call, Barclays remains skeptical about the reliability of this growth in the long term.
The regulatory landscape poses additional uncertainties for Apple, as Long points out the potential impact of investigations into app stores and the upcoming determination on the Google Traffic Acquisition Cost (TAC) in 2024. These factors contribute to Barclays’ cautious stance on Apple’s future performance.
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The concerns surrounding Apple’s stock are not isolated, as broader market conditions also played a role in the recent downturn. US stocks retreated, signaling a potentially downbeat start to 2024 after a strong performance in the previous year. The S&P 500 lost nearly 0.6%, with the Dow Jones Industrial Average rising just above the flatline. The Nasdaq Composite, driven by tech stocks, led the losses, shedding close to 1.6%.
The overall market sentiment appears to have been influenced by the Barclays analysts’ downgrade of Apple’s stock. The tech sector, in particular, faced headwinds, with Apple shares experiencing a decline. The recent stall in the stock market rally, after two months of gains, is indicative of the concerns that analysts have raised regarding Apple’s performance and the broader tech industry.
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