Apple Inc. shares fell in premarket trading on Wednesday, suggesting the iPhone maker would extend its 2025 weakness as Wall Street remains concerned about its growth prospects and position in the landscape for artificial intelligence.
Needham downgraded the stock to hold from buy, making it the latest firm to turn more cautious. Analyst Laura Martin sees a number of risks, including competition and tepid growth trends, coupled with a valuation that “looks expensive on several metrics.”
Shares fell 0.6% in premarket trading. The stock is down 19% this year as of its last close, making it the weakest of the Magnificent Seven. While much of the selloff reflects political uncertainty, as Apple is seen as especially vulnerable to tariffs and it has repeatedly been singled out by the Trump administration for its global manufacturing footprint, its struggles with AI have been another significant headwind.
“For this stock to work, it must have the catalyst of an iPhone replacement cycle, which we do not foresee in the next 12 months,” Martin wrote, adding that innovations with generative artificial intelligence — an area where Apple has been lacking — “open the door for new hardware form factors that threaten iOS devices.”
OpenAI recently announced its acquisition of io, a startup co-founded by legendary Apple designer Jony Ive.
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Needham is the latest firm to sour on Apple this year, a trend that has made it the least-loved of the biggest tech companies. Both Jefferies and Rosenblatt Securities downgraded the stock in May, while Oppenheimer, MoffettNathanson, Loop Capital, Aletheia Capital, and DBS Bank cut it earlier in 2025.
Currently, fewer than 60% of the analysts tracked by Bloomberg recommend buying the stock, a low rate among megacaps. Microsoft Corp., Amazon.com Inc., Nvidia Corp., and Meta Platforms Inc. are have buy ratios near or above 90%.
