Apple's stock price suffers its worst drop in two and a half years! AI production difficulties + tariff impact

JIN10
2025.03.11 08:54
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Apple's stock price experienced its largest single-day decline in two and a half years on Monday, dropping by 4.85%, primarily due to a widespread sell-off of technology stocks and investor concerns about the multiple adverse factors facing the company. Citigroup analysts have lowered their expectations for iPhone sales in 2025, citing delays in the Siri upgrade, with projected sales growth of only 2%. Additionally, tariff pressures may also impact Apple's profits

On Monday, Apple's (AAPL.O) stock price experienced its largest single-day drop in two and a half years, as tech stocks were broadly sold off, and investors expressed concerns over multiple adverse factors facing the company.

Apple's stock fell by 4.85%, exceeding the Nasdaq Composite Index (COMP) drop of over 4%. Among the "Magnificent Seven," Apple was the third worst performer, contributing to a decline of about 71 points in the Dow Jones Industrial Average (DJIA).

According to Dow Jones Market Data, this marks the largest single-day drop in Apple's stock price since September 29, 2022, when the stock fell by 4.91%.

AI Upgrade Delayed, iPhone Sales Forecast Downgraded

Previously, Citigroup (C.N) analyst Atif Malik downgraded expectations for Apple's iPhone business in 2025, citing a delay in the rollout of Siri upgrades. This upgrade was originally planned to introduce more Apple Intelligence AI features to enhance Siri's capabilities.

Citigroup now expects iPhone sales in 2025 to grow by 2% to 232 million units, down from a previous expectation of 5% growth.

"While the user experience of Apple Intelligence varies, the Siri upgrade was expected to drive this year's iPhone replacement wave," Malik stated in a report to clients, reiterating a "buy" rating on Apple with a target price of $275. He added, "The market originally anticipated that significant upgrades to Siri—including on-screen awareness, personal context, and deep app integration—would be released between April and May this year."

However, last Friday, Bloomberg reported that Apple had confirmed it would delay the AI feature updates for Siri, pushing them to "within the next year," whereas this upgrade was initially planned to be part of the iOS software update in April.

Tariff Pressure Unresolved, May Weigh on Apple's Profits

Citigroup also noted that Apple has yet to receive any tariff exemptions. If this tariff exemption application is not approved, Malik estimates it could impact Apple's gross margin by 1.7 percentage points.

This estimate is based on the assumption that 90% of Apple products are manufactured in China and that 40% of sales come from the United States.

Additionally, Malik has also downgraded earnings expectations for the fiscal years 2025, 2026, and 2027 by about 1%

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