Apple witnessed a sharp decline of nearly 3.6 per cent on Tuesday, marking a seven-week low, as Barclays downgraded the company’s shares amid concerns of sustained weak demand for its range of devices, from the flagship iPhone to the Mac, throughout 2024.
This downgrade from Barclays, the second brokerage to issue the equivalent of a “sell” rating on Apple, amplifies the challenges the company faces in the coming year. Apple’s stock, which constitutes a substantial 7 per cent of the S&P 500’s market weight, dragged the broader index 0.56 per cent lower on Tuesday.
The tech giant, which experienced 50 per cent surge in 2023, hitting a record high in mid-December, is now grappling with a demand slowdown since early last year, further exacerbated by subdued performance in China.
Barclays analyst Tim Long, in a note, expressed concerns about the lackluster performance of the iPhone 15 and a pessimistic outlook for the upcoming iPhone 16. He highlighted the challenges in both the Chinese and developed markets, stressing on the competitive pressure from the revival of local rival Huawei. The impact on Apple’s market position was evident as more than USD 100 billion of its market capitalisation evaporated in the stock rout on Tuesday, closing at USD 185.64.
The downgrade to “underweight” from “neutral” by Barclays also underscored the mounting risks for Apple’s services business. This business segment, accounting for nearly a quarter of the company’s total revenue, has recently come under scrutiny in the United States and other countries due to concerns over app store practices.
