Apple Shares Face Mounting Analyst Doubts

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A cautious outlook from several prominent research firms is casting a shadow over Apple's stock as the new year begins. Concerns are centered on stretched valuations, slowing growth in key segments, and leadership changes within the company's critical artificial intelligence division.

In a significant move, the analysts at Raymond James downgraded their rating on Apple from "Outperform" to "Market Perform." Their rationale points to an overextended valuation, with the stock currently trading at 35.9 times earnings—a premium to its historical average. The firm expressed skepticism that strong iPhone sales in the fourth quarter of 2025 would justify further share price appreciation. Furthermore, Raymond James questioned whether anticipated AI features or a rumored foldable iPhone could provide meaningful new growth catalysts, describing the planned Siri overhaul for spring 2026 as likely too weak to move the needle.

Key Revenue Streams Lose Momentum

Separate analysis from UBS highlights a pronounced deceleration in Apple's App Store revenue growth. While maintaining a $280 price target, the firm warned that growth for the December quarter of 2025 likely slowed to approximately 7%, a drop from 10% in September and 12% in June. When adjusted for currency effects, the growth rate may have been as low as 5%. A persistent area of weakness is the gaming category, historically one of the App Store's most profitable segments.

Adding to the demand concerns, Apple's primary manufacturing partner, Foxconn, struck a cautious tone despite reporting record fourth-quarter revenue. The company noted a slight decline in its "smart consumer electronics" segment, which includes iPhone production, and warned of a seasonal slowdown expected in the first quarter of 2026. This assessment arrives as markets are already scrutinizing the sustainability of iPhone demand.

Leadership Shift in AI at a Critical Juncture

Amid these challenges, Apple confirmed a major leadership transition in its AI and machine learning division. John Giannandrea, who led the effort, will move into an advisory role ahead of his retirement in spring 2026. His responsibilities will be assumed by Amar Subramanya, who steps into the role of Vice President of AI. This change in command introduces an element of uncertainty during a pivotal phase for the company's AI strategy.

A Divergence of Opinion on Wall Street

Not all market experts share this pessimistic view. JPMorgan reaffirmed its "Outperform" rating, contending that the primary growth drivers for 2026 will be Apple's product cycle and cost management, rather than near-term AI developments. The overall analyst consensus, based on 41 analysts, remains a "Moderate Buy" with an average price target of $290.85.

Investors will gain clearer insight when Apple reports earnings for its first fiscal quarter of 2026 on January 28. The company has previously guided for revenue growth between 10% and 12%, with a gross margin projected in the range of 47% to 48%.