Shares of Apple (AAPL) tumbled almost 4% on Tuesday following another analyst’s outlook change on the stock.
Today, hit a new four-month low, following a report from Bloomberg indicating the company has seen an 18% slide in iPhone sales in China during the holiday season.
The stock is also reeling from two downgrades by Loop Capital and Jefferies.
The 1-2 combination punch to the world’s largest smartphone manufacturer has new seen the stock fall about 15% from the late December all-time highs. The downturn reflects growing concerns about the iPhone's demand amidst economic pressures and increasing competition in China.
Earlier in the month, in a bid to boost sales, Apple discounted its new iPhone models in China. The company offered cuts up to about $110 per phone. The strategy aligns with Apple's broader efforts throughout 2024 to revive its sales in China through various incentives.
Despite the moves, today's focus on holiday sales casts doubts on their effectiveness, compounding fears that the iPhone may be losing its allure in the Chinese market.
Contrasting Apple's struggles, Huawei, Apple’s key rival in China, enjoyed a 15.5% year-over-year increase in sales during the December quarter. The company’s success was driven by its Nova 13 and Mate 70 series phones, which are comparable to the iPhone. Huawei’s growth stands out in a market where overall smartphone sales dipped by 3.2%.
Bloomberg also noted a global contraction of about 5% in iPhone sales during the same period, with Apple losing market share to Chinese manufacturers and even Samsung experiencing similar challenges.
Last week, we pointed to Apple shares’ break below their 50-day moving average a a monumental shift in the trend. Now, Apple's shares approach their 200-day moving average for the first time since May.
Long-term investors may see this as a buying opportunity but should beware.
Apple shares remain on of Wall Street’s favorite stocks. Over the last two months, the Apple has seen the percentage of buy recommendations drop from 71% to 67%, continuing a trend of downgrades.
That trend is likely to continue next week unless the company beats its earnings expectations handily on January 30.
Apple’s 200-day moving average currently sits at $218, though investors should target a possible decline to $200.
