Apple's stock is down 17% YTD. Why don't analysts expect a quick reversal?

Apple shares have lost 17% of their value since the beginning of the year and remain one of the main outsiders in the Dow Jones blue chip index. Although most analysts stick to the recommendation to buy the securities, some are sounding the alarm. Jefferies upgraded the securities in early July, changing its rating for the fifth time this year, but warned of weak sales growth, the threat of duties and lagging AI. And the main bear on the company, MoffettNathanson, reiterated its sell recommendation and expects the share price to fall by a third.

Only three companies - UnitedHealth, Merck and Salesforce - performed worse than Apple in the Dow Jones Industrial Average in the first half of 2025, notes Barron's. The index itself, meanwhile, increased by a whopping 5%. Apple ranks third in the S&P 500 in terms of capitalization, but it, along with electric car maker Tesla and Google owner Alphabet, is holding back the index's current rally, accounts Bloomberg.

Despite that, many on Wall Street remain optimistic: nearly two-thirds of the 50 analysts tracking the company's stock still maintain a Buy rating - that's a higher percentage of positive recommendations than the overall market, Barron's wrote.

However, for MoffettNathanson analyst Craig Moffett, Apple's current performance only reinforces the view that Apple stock is worth selling and that its position is unlikely to improve anytime soon, Barron's reports. Moffett maintained his Sell rating and kept his target price on the stock at $139 - a third lower than current and the lowest forecast on Wall Street. By comparison, the average target for Apple's stock is $228.41, shows MarketWatch: that's about 10% above the current value.

Jefferies analyst Edison Lee raised his rating on Apple shares from Underperform («below market») to Hold in early July, but his opinion on the stock has fluctuated steadily this year, notes MarketWatch. Lee took a bearish stance in January, changed it to neutral in April, and downgraded again less than a month later, only to raise it again in the summer.

For a variety of reasons, from U.S. import duties and their impact on iPhone demand to concerns about sales in China, which he called «a mystery,» Barron's writes. In addition, the analyst doesn't like that the company is lagging behind in artificial intelligence. According to Moffett, «there is still a sense that Apple does not have a clear course in AI.»

Moffett is pessimistic on Apple's financial results: his FY 2026 earnings forecast is 14% below consensus estimates, and his target price is based on a price-to-earnings ratio of 21, whereas the stock is currently trading at a multiple of 27, calculated with Wall Street's more optimistic outlook.

The analyst also believes investors are underestimating a possible blow to Apple's huge services business because of a legal dispute with gaming company Epic Games over App Store commissions.

«Estimates for the service segment also remain largely unchanged despite the severe negative developments. We continue to believe that the next blow will be that these forecasts will have to be revised downward - and perhaps quite significantly - for the remainder of the year and beyond,» Moffett wrote. 

While upgrading Apple's stock rating, Edison Lee was nonetheless not overly enthusiastic, noting that Wall Street is being «too calm» about the threat to Apple from duties. Current forecasts are likely «overly optimistic,» the analyst said. He expects earnings per share to decline about 7% this fiscal year and next even with the mildest duties on India, Vietnam and China.

However, strong results for the fiscal quarter, which ended in June, «could keep the stock stable» in the near term, he added. Apple offered discounts in China last quarter to protect its position in that market. and in the U.S. market, increased demand in April and May could be because consumers were trying to get ahead of the possible imposition of new duties. Therefore, Apple's reporting could provide a «pleasant surprise,» the analyst allowed. 

But the company's forecast for the September quarter will be «subdued,» and iPhone sales growth in units in the second half of the year could be «negligible,» Lee warned. «Given the strong sales [in the second quarter], we expect demand in [the third quarter] to sag,» he wrote in a note. 

The new iPhone 17 is expected to be released in September, but it has the Jefferies analyst worried about the «lack of new features.» AI has yet to become a factor that can «fundamentally change things,» he acknowledged. Apple's slowness on AI - or at least the perception that the company is inferior in this area - is one of the main reasons why the company's stock is lagging behind many of its «Magnificent Seven» competitors, such as Microsoft and Meta Platforms, Lee said.

Apple shares are up 4.5% on Monday-Tuesday this week - partly due to a report by Bloomberg that the company may use technology from OpenAI (developer of ChatGPT) or Anthropic to beef up its Siri voice assistant, Barron's suggested.

In addition, the stock may have gotten a boost from the successful launch of F1 The Movie, Apple's own movie starring Brad Pitt, the publication noted.

Apple's securities were up about 1% at the premarket on Wednesday, July 2.

This article was AI-translated and verified by a human editor