Apple Downgraded to Underperform Amid Overestimated iPhone Demand

Apple Inc. has recently faced multiple downgrades from prominent financial analysts, primarily due to concerns about overly optimistic market expectations for its iPhone sales and upgrade cycles. Jefferies analyst Edison Lee downgraded Apple from "Hold" to "Underperform," citing that strong demand for the iPhone 17, driven by stable or reduced pricing, is already priced into the stock, leading to inflated expectations for future models like the iPhone 18 Fold. This downgrade also reflected a potential 20% downside from recent stock prices, emphasizing risks of a major correction. Similarly, Morgan Stanley's Katy Huberty lowered her rating on Apple from "overweight" to "equal weight," warning that the stock has outpaced fundamentals and that growth is expected to moderate despite Apple's strong financial performance, including $94.8 billion in recent quarterly revenues driven by its services segment. These downgrades contributed to notable declines in Apple's stock price, reflecting growing investor caution amid high expectations in the tech sector. Overall, while Apple's robust revenue and broad product ecosystem remain strengths, analysts urge tempering expectations on future iPhone demand and valuation.