Apple shares fell again early Wednesday morning as bond yields rose. The iPhone maker is battling headwinds in the technology sector and is under pressure to show it is ready to compete in the field of artificial intelligence.
Apple fell 0.4% to $184.84 in pre-market trading on Wednesday. It was set to add to the previous day's 3.6% drop, when a downgrade by Barclays and rising bond yields hit stocks and the tech sector more broadly, but the tax-seeking sell-off could make the move worse.
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Apple shares fell again early Wednesday morning as bond yields rose. The iPhone maker is battling headwinds in the technology sector and is under pressure to show it is ready to compete in the field of artificial intelligence.
Apple fell 0.4% to $184.84 in pre-market trading on Wednesday. It was set to add to the previous day's 3.6% drop, when a downgrade by Barclays and rising bond yields hit stocks and the tech sector more broadly, but the tax-seeking sell-off could make the move worse.
It's hardly a crisis. Apple is up 47% in the past 12 months through Tuesday's close, down only slightly from its Dec. 14 closing high of $198.11. But the company faces challenges, along with other Magnificent Seven stocks that drove last year's rally and showed they can deliver enough growth to justify further gains.
DA Davidson analyst Gil Luria gave the stock a Neutral rating and kept his price target unchanged at $166 in a research note on Tuesday, saying Apple expects to innovate to improve growth of existing products and add new products. He said there was a need to “break the deadlock.”
“We believe Apple will return to moderate growth this year, driven by services and Mac comparability. Near-term variables include shorter quarters, less competitive supply chains, and Chinese regulations. and more,” Luria wrote.
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One of the key areas where Apple has shown that it can still successfully innovate is in the area of artificial intelligence. Apple reportedly plans to invest billions of dollars in Nvidia chips to power its AI efforts, including a revamped Siri digital assistant, but has so far remained mum about the project. is closed.
“Although the current applications are less critical (such as message autocomplete), we believe Apple is well-positioned to leverage its unparalleled walled garden consumer data set to deliver new applications and experiences.” writes Luria.
Email Adam Clark at adam.clark@barrons.com.
