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Apple investors turn jittery as earnings loom

Concern about slow sales in China and roll-out of company’s AI system

Apple's share price has fallen by nearly 15 per cent since late December. Photograph: iStock
Apple's share price has fallen by nearly 15 per cent since late December. Photograph: iStock
Proinsias O'Mahony's picture
Proinsias O'Mahony
Mon Jan 27 2025 - 05:45

Apple reports earnings on Thursday, and investors are worried. Each of the other magnificent seven stocks have hit the ground running in 2025, but not Apple.

Since peaking on St Stephen’s Day, shares have fallen as much as 15 per cent, erasing more than $600 billion (€570 billion) in market capitalisation and resulting in Nvidia surpassing the iPhone maker as the world’s most valuable company. Multiple reports of lacklustre iPhone sales in China, coupled with concerns over the roll-out of Apple’s AI system, Apple Intelligence, have hit sentiment and driven a number of analyst downgrades.

Jefferies warns Apple will miss earnings and guidance estimates, saying consumers are “not yet interested in AI on smartphone” and hopes for an AI-driven “super upgrade cycle” are too high. That’s echoed by Apple analyst Ming-Chi Kuo, who finds “no evidence” of Apple Intelligence boosting iPhone demand, and says 2025 iPhone shipments may fall 10 per cent below consensus estimates.

Loop Capital is especially blunt, saying Apple Intelligence roll-out has been “dismal”. Of course, not everyone is wary, with Wedbush’s Dan Ives saying the “panic and bear frenzy” is “way overdone”. Bears might suggest that bad earnings news is not yet fully priced in. Things got overheated during the post-election rally, so much so the recent correction has merely brought Apple back to where it was trading in November. Note too that Apple shares have fallen even as the vast majority of S&P 500 stocks have been rallying – a rare divergence, and one that speaks to current investor concern.

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