Another institution is bearish on the iPhone! Hedgeye: Apple's stock price may fall by 30%

Another institution has issued a warning about Apple's prospects, causing a decline in Apple's stock price.

On Friday, January 12th, Hedgeye, an investment research institution, announced that it has added Apple to its latest short-selling target. Hedgeye predicts that Apple's revenue growth will remain weak until 2025, due to sluggish sales, lack of innovation, and intensified competition in the personal computer market from Microsoft's artificial intelligence (AI) capabilities.

Hedgeye also predicts that Apple's stock price will fall by 30% from its current level.

After the release of Hedgeye's forecast, Apple's stock price initially rose by 0.6% but then fell again during midday trading. It later rebounded slightly and ended the day with a 0.18% increase, accumulating a 2.6% gain for the week.

As of Thursday this week, Apple's stock price has fallen by more than 6% from its closing historical high set on December 14th, just one week after being downgraded by Wall Street institutions for consecutive weeks, resulting in a nearly 6% decline. On Thursday, Apple's market value was briefly surpassed by Microsoft, reflecting Microsoft's challenge to Apple's position as the highest-valued company in the US stock market, fueled by the AI boom.

Wall Street CN previously mentioned that last Tuesday, Apple's stock price experienced its largest drop in nearly five months, falling over 4% during trading and closing down by approximately 3.6%. The main cause of the sharp decline in stock price that day was a report from Barclays downgrading Apple's rating.

Barclays' report downgraded Apple's stock rating from "hold" to "underweight," marking the first time the bank has lowered Apple to this rating since 2019. At the same time, these analysts slightly lowered Apple's target price from $161 to $160, about 17% lower than the closing price of the previous Friday. This implies that Barclays expects Apple's stock price to fall by approximately 17% from the previous Friday's level within the next year.

In addition to Apple's continued weak performance, Barclays' report also predicts that the growth of Apple's service business will slow down, regulatory risks will increase, and the returns from its ecosystem will diminish. The report warns that Apple's stock valuation is high, and while its valuation multiples expand, its performance remains weak, making the rise in stock price unsustainable. Last Thursday, Piper Sandler's chief analyst Harsh Kumar downgraded Apple's rating from overweight to neutral in the report, citing the belief that the weak macro environment would suppress Apple's demand. However, Piper Sandler gave a target price of $205, about 11% higher than Wednesday's closing price, indicating that Apple's stock still has an 11% upside potential.

According to data compiled by the media, by 2024, Apple has become the least recommended large-cap tech stock. After Piper Sandler's downgrade, the proportion of analysts bullish on Apple hit a three-year low. In the past four quarters, Apple was the only large-cap tech stock to see a decline in revenue. The average analyst expectation compiled by the media shows that Wall Street currently expects Apple's revenue growth rate for the fiscal year 2024 to be only 3.6%, and the profit growth rate to be 7.9%.

Apple recently pinned its hopes of boosting the sluggish market sentiment on the mixed reality headset, Vision Pro. Vision Pro started accepting pre-orders on January 19th and will be launched on February 2nd at a price of $3,499.

This Friday, Apple's "prophet" and TF International analyst Ming-Chi Kuo wrote in an article that Vision Pro's inventory is only 60,000 to 80,000 units. Considering the novelty of the product and the loyalty of Apple fans, he believes that Vision Pro will easily sell out after it goes on sale.

However, Ming-Chi Kuo also pointed out that Vision Pro only served as a technology demonstration last year, without indicating its important product positioning and key applications. If Vision Pro fails to sell out instantly, it will be below expectations and will impact Apple's stock price and the stock prices of its supply chain.

Ming-Chi Kuo also emphasized that since there is no information about future Vision series products, it cannot become a trading theme at the moment. The market response to Vision Pro will be the key focus for Apple's supply chain this year.