Reasons Apple Stock Is No Longer a ‘Buy’ for Needham Analysts

Apple’s Stock Downgraded Amidst Concerns

Apple has recently been marked as one of the poorest-performing stocks for 2025, alongside Tesla. On Wednesday, analysts from Needham changed their rating on Apple from “buy” to “hold,” and they’ve also removed their stock price target.

Analyst Laura Martin has expressed doubts about a robust upgrade cycle for the iPhone, suggesting that Apple really needs to lift its stock price. She believes the company is not positioned well for the upcoming technological upgrades.

Adding to the concerns, a study from a high-tech analytics firm has also reduced its growth estimates for global smartphone shipments this year.

It’s pretty clear, the esteemed “Magnificent Seven” stocks, including Apple, are losing their allure, at least according to Needham’s analysts.

There’s a sense that the ratings for iPhone manufacturers seem a bit inflated compared to their counterparts in major tech. On Wednesday, Needham indicated that Apple doesn’t seem ready for a significant device upgrade cycle. This downgrade comes as Apple has displayed one of the worst performances among the so-called epic stocks this year, currently trailing closely behind Tesla, both having dropped about 18% in value.

The demand for smartphones is also facing some headwinds, as per the analysis from the technology firm. They lowered their global smartphone shipment growth forecast to just 1.9% for 2025, with North American shipments expected to decline by 3%, marking the lowest outlook in any region.

“Everyone’s looking at Apple and Samsung for their presence in the U.S. market,” said Liz Lee, an associate director at Counterpoint. “While tariffs are certainly a factor in adjusting forecasts, they also reflect a dip in demand.”

Last month, former President Donald Trump warned Apple about impending tariffs of at least 25% on iPhones sold in the U.S. that are made outside the country, which includes production shifts to India to sidestep various taxes.

Compared to its peers, Apple faces challenges since it primarily enhances its ecosystem through advances in artificial intelligence. In contrast, Alphabet, the parent company of Google, is able to generate revenue by charging other businesses for the use of its AI capabilities. Similarly, Amazon benefits from companies relying on its cloud services.

Interestingly, while Needham points out these limitations, Apple is set to potentially influence its future at the upcoming Worldwide Developers Conference, where a new iOS update and possible partnership with Google may be unveiled.

Among the twelve analysts who cover Apple, eight maintain a “buy” or similar rating, while two hold a neutral stance, and two have suggested selling. Their target prices vary from $170 to $270.