Apple is facing cascading challenges. Its growth is slowing, surging memory prices threaten to erode its margins, and more financial institutions are souring on the company.
The latest hit came on Monday, as investment firm Jefferies downgraded Apple’s stock from “hold” to “underperform”—the equivalent of a “sell” rating—cutting its price target from $285.56 to $263.66. Jefferies analysts slashed the rating after checks on Apple’s supply chain indicated that the company had canceled a rumored all-glass iPhone expected to launch for the iPhone’s 20th anniversary next year, as well as ongoing struggles countering surging memory prices, and limited signs of progress in its AI efforts.
“We believe this shows that introducing new form factors in the iPhone to drive higher [average selling price] is more difficult than expected,” Jefferies analysts wrote in regards to the all-glass iPhone, which the firm had expected to sell for a premium. Apple’s expected foldable phone, which it may reveal next month, will be the company’s only margin driver, though memory costs are expected to increase the selling price of the phone to $2,199 for the 256 gigabyte version and $3,099 for the 2-terabyte version, the analysts estimated.
