Brandon Nispel, a KeyBanc Analyst warns that investors should take profit on Apple Inc. (NASDAQ:AAPL), as the share price is likely to see a significant decline in the coming year.
Nispel, a financial firm that specializes in investment banking and securities analysis, downgraded Apple to an “underweight rating” on Friday. It said the company’s shares may fall to as low as $200. This would indicate a 13% drop from where they are now.
The tech giant’s launch of iPhone SE early in 2025 could “possibly be cannibalistic for iPhone 16 sales.”
Apple’s stock price has risen by 40% in the last six months.
iPhone SE may be bad for Apple’s stock
KeyBanc downgraded Apple on Monday, following a survey where 59% said that they would upgrade to an iPhone 16 if given the chance.
However, 61% who expressed interest in upgrading also showed interest in the iPhone SE.
In his research note, he said that if the iPhone SE was a success, iPhone sales could increase, but prices on average could fall, which is contrary to what most people think.
The iPhone SE hasn’t been released since 2022.
Brandon Nispel has turned negative on Apple’s stock, also because it is “unrealistic” to expect that revenue growth will be seen across the board in all regions and categories by 2025.
It’s also not as if the Cupertino-based firm offers a huge dividend yield that would make income investors rush to buy its stock at these current levels.
Apple’s share price will not rise immediately if AI is used.
KeyBanc’s call for Apple Inc to be dovish comes just days before Apple Inc, a Nasdaq listed company is due to release its fourth-quarter financial results. The consensus is that it will earn $1.54 per share, compared to $1.46 a year earlier.
Apple Intelligence, its brand of AI-based solutions, was announced in June by the multinational, with hopes that this would lead to a significant upgrade cycle.
Analysts have recently expressed concern that Apple Intelligence might not be able drive demand for material anytime soon.
Brandon Nispel said that AAPL must “articulate a monetisation plan for Apple Intelligence”, in its upcoming quarterly earnings report, for the stock price to continue to rise.
He told his clients that Apple is working to raise awareness. However, monetisation may take some time.
UBS analysts warned earlier this week that iPhone unit sales would likely be flat year over year in the September quarter of the company, further demonstrating that AI hype has yet to reflect on revenues.
The post Apple Stock Performance could be affected by the iPhone SE may change as new information becomes available.
