Apple's Stock Drops Due to High Expectations for New iPhones, Analyst Says

TapTechNews October 7th news, tonight Beijing time, according to Bloomberg, due to Jefferies analyst believing that investors' expectations for Apple's latest iPhone are too high, Apple's stock price dropped by more than 1% - this is the first batch of iPhones equipped with AI functions.

Jefferies analyst Edison Lee pointed out: The current high expectations for iPhone 16/17 are premature. He explained that due to the lack of significant new features and limited AI applications, the optimistic expectations of a 5%-10% increase in shipments are likely not achievable. Previously, Jefferies' rating for Apple stock was buy, and now it is adjusted to hold.

Since April, Apple's stock price has rebounded by approximately 36%, mainly due to the market expecting that AI functions will stimulate consumers to upgrade their phones, thereby promoting the company's revenue to grow again. However, the early market reaction shows that the demand is not as strong as expected.

Edison Lee acknowledges the long-term potential of AI and believes that Apple is the only company that can provide low-cost personalized AI services by integrating hardware and software and utilizing its proprietary data. But he also said that Apple's current valuation is on the high side, and AI will not significantly boost performance in the short term.

He said: Smartphone hardware must be redesigned to truly support AI applications. This process may not be achieved until 2026 or 2027.

TapTechNews learned from Bloomberg that compared to other large technology companies, Wall Street is more cautious about Apple. Only 65% of analysts recommend buying Apple stocks, while the buy recommendation rates for Microsoft, NVIDIA, and Amazon are close to or exceed 90%.