Apple stock is likely to experience more losses on Wednesday after dropping 3.2% on Tuesday. Shares are down 0.6% in pre-market trade.
On Tuesday, Apple stock fell after two Wall Street analysts issued downgrade calls with Jefferies analysts adjusting their rating on Apple stock to Underperform from Hold on Monday, anticipating that the company will not meet its earnings and guidance targets for the upcoming fiscal Q1 2025 report.
The firm also lowered its price target for Apple's shares to $200.75 from $211.84, suggesting a potential 13% decrease from the stock's last closing price.
The downgrade was influenced by weaker than expected iPhone sales and a less optimistic forecast for the iPhone 17 and 18 models. The analysts attributed this outlook to a slower adoption and commercialization of artificial intelligence technologies.
Furthermore, Jefferies analysts predict that Apple will not achieve its revenue growth guidance of 5% for the first quarter. They also expect the company to project only low single-digit revenue growth for the second quarter, which falls short of the consensus.
Loop Capital analysts also downgraded their rating on Apple shares (NASDAQ:AAPL).
Katie Stockton, an analyst at Fairlead Strategies, noted the impact of the downgrade on Apple's stock performance.
"Apple gapped lower yesterday on negative short-term momentum," she observed.
Stockton's analysis of overbought/oversold metrics indicated that the downward gap may persist, posing a risk that Apple's shares could fall below the 200-day moving average of $217, potentially reaching the next support level around $208.
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