Shares of tech giant Apple (AAPL) fell in Tuesday’s trading session after analysts at Jefferies and Loop Capital downgraded the stock due to weak iPhone sales and a lack of interest in AI products among consumers. Jefferies’ 4.4-star analyst, Edison Lee, downgraded Apple to a Sell rating and reduced his price target to $200.75. Meanwhile, five-star Loop Capital analyst Ananda Baruah downgraded the stock from Buy to Hold with a revised price target of $230 per share.

It seems like Apple’s struggles in China were a major factor in the downgrades. In fact, iPhone sales in the region fell between 15% and 20% year-over-year as products from Huawei and Xiaomi continue to gain popularity. Additionally, the overall market share for iPhones fell roughly 1% year-over-year in Q4 to 23%, despite a 3% rise in smartphone shipments.

It also does not help that the company’s push into AI is not paying off as expected. Indeed, when Apple first revealed its AI platform, Apple Intelligence, many analysts had initially anticipated that it would drive a sales supercycle as consumers upgraded to get access to AI features. However, current estimates suggest that this may not actually materialize.

Is Apple a Buy or Sell Right Now?

Overall, analysts have a Moderate Buy consensus rating on AAPL stock based on 19 Buys, six Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 15% rally in its share price over the past year, the average AAPL price target of $244.36 per share implies 9.8% upside potential.

Apple (AAPL) Sinks after Getting Slapped with Multiple Analyst Downgrades

Apple's stock fell due to analyst downgrades from Jefferies and Loop Capital, citing weak iPhone sales and lack of consumer interest in AI products. The downgrades were influenced by a 15-20% year-over-year decline in iPhone sales in China, where Huawei and Xiaomi products are gaining popularity. The overall market share for iPhones fell by 1% year-over-year in Q4, despite a 3% rise in smartphone shipments. Apple's push into AI, Apple Intelligence, is also not performing as expected.