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Apple's China problems keep weighing on the stock

Jan 22, 2025 - businessinsider.com
Apple is facing challenges as analysts downgrade its stock due to weak iPhone demand, particularly in China. Jefferies downgraded Apple to "underperform," while Loop Capital reduced its rating to "hold" from "buy." The company’s shares have fallen over 10% in 2025, with a notable drop of more than 3% recently. Analysts cite a 4% year-over-year decline in iPhone shipments for the first quarter, with mixed reviews for the AI-powered iPhone 16, whose key features are unavailable in China. Local competitors like Xiaomi are gaining market share, further impacting Apple's performance in this crucial region.

Despite the initial excitement around Apple's AI features announced at the Worldwide Developers Conference in 2024, the anticipated "golden" upgrade cycle has not materialized. The delayed rollout of Apple Intelligence, particularly in China, and the late entry into AI compared to competitors have contributed to Wall Street's waning confidence. MoffettNathanson issued a rare "sell" recommendation, highlighting Apple's struggles in China. Analysts are concerned that any further delays in Apple's advanced packaging roadmap could exacerbate these challenges.

Key takeaways:

  • Apple has been downgraded by analysts at Jefferies and Loop Capital due to weak iPhone demand, particularly in China.
  • The AI-powered iPhone 16 has received mixed reviews, and its major feature, Apple Intelligence, is not available in China.
  • Chinese smartphone makers like Xiaomi are gaining market share, impacting Apple's performance in the region.
  • Apple's stock has fallen more than 10% in 2025, with concerns about its China performance affecting investor confidence.
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