Apple has had a poor start to 2024 and things may get much worse, according to a UBS note warning shares could fall almost 30 per cent.
It’s not that UBS thinks Apple shares will sink, but it sees it as a possibility – a worst-case scenario and a potential surprise for 2024.
UBS cites various concerns, including “no obvious AI strategy”, weak demand and political risk in China, a mature smartphone cycle and antitrust concerns, among others.
All companies face risks, of course, but Apple’s valuation is concerning UBS. Some 80 per cent of revenue pertains to hardware, but Apple “trades on a software multiple”.
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Meanwhile, Apple’s 2024 earnings estimates have risen slightly over the past year – much more slowly than all but one (Tesla) of the other members of the so-called magnificent seven group of tech stocks.
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