Jefferies: Market expects iPhone sales to be "too high", downgrades Apple's rating to "hold"
Jefferies downgraded Apple from "buy" to "hold" with a target price of $205, citing that the market's expectations for iPhone sales volume are "too high". Analyst Edison Lee pointed out that the expected growth of iPhone sales by 5% to 10% is "unlikely to materialize", with the projected growth rate for the iPhone 16 cycle being only 2.5%. Nevertheless, Apple's long-term capabilities in the field of artificial intelligence are still promising, especially in collaboration with OpenAI
According to the Zhitong Finance and Economics APP, Jefferies released a research report, downgrading Apple (AAPL.US) from "buy" to "hold" with a target price of $205, citing "overly high" expectations for the iPhone. Before the U.S. stock market opened on Monday, the stock fell by about 1% as of the time of publication.
Analyst Edison Lee wrote in a report to clients, "We are optimistic about Apple Intelligence in the long term, as Apple is the only company capable of providing low-cost, personalized artificial intelligence services through proprietary data as a software-hardware integrated enterprise. However, smartphone hardware needs to be redesigned to achieve true artificial intelligence, which may be around 2026/27. In our view, expectations for the iPhone 16/17 are premature."
Lee added that the expectation of a 5% to 10% increase in iPhone sales is "unlikely to materialize" due to "lack of substantial new features and limited coverage of artificial intelligence." Therefore, he believes that the growth rate for the iPhone 16 cycle is only 2.5%.
Nevertheless, Apple's long-term artificial intelligence capabilities are still promising, partly due to its partnership with OpenAI and its OpenELM large language model, which is believed to consume only 1.56GB of RAM. Another model, Ferret UI, focuses on understanding the user's mobile screen.
Lee further stated, "We believe that Apple is a leader in mobile artificial intelligence technology, and its chip-operating system-artificial intelligence integrated ecosystem puts it far ahead of the fragmented Android competition."