Apple, which has been downgraded by investment banks repeatedly, is now facing new negative news.
According to media reports on Friday, January 5th, Eastern Time, the U.S. Department of Justice is nearing the end of an investigation into Apple. The Department of Justice may file a wide-ranging antitrust lawsuit against Apple as early as the first half of 2024, targeting Apple's strategies to protect its monopoly position.
Insiders revealed that the focus of the Department of Justice investigation is how Apple uses its control over hardware and software to make it difficult for consumers to switch to other companies' devices and to increase the difficulty of competition for rivals and Apple products. The Department of Justice investigated how Apple's smartwatch, the Apple Watch, is more compatible with Apple compared to other phone brands, as well as how Apple prevents other financial companies from providing similar payment services to Apple.
After news broke that Apple is close to facing an antitrust lawsuit, Apple's stock, which had already turned higher during midday trading on Friday, fell again. It dropped nearly 1% during the day and closed at a new low since November 6th, marking five consecutive trading days of decline.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ef39eef7-7416-42da-a528-4d89f365b8a9.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ef39eef7-7416-42da-a528-4d89f365b8a9.jpeg"/>
This is another piece of negative news for Apple this week. In the past three days, two Wall Street institutions have downgraded Apple's stock rating due to concerns about Apple's prospects.
Earlier this week, Apple's stock experienced its largest daily decline in nearly five months, falling more than 4% during trading and closing down approximately 3.6%. The main reason for the sharp drop in stock price that day was a report from Barclays downgrading Apple's rating.
Barclays downgraded Apple's stock rating from &#34;hold&#34; to &#34;underweight&#34; in the report, marking the first time the bank has downgraded Apple to this rating since 2019. At the same time, these analysts slightly lowered Apple's target price from $161 to $160, about 17% lower than the closing price on the previous trading day last Friday. This means that Barclays predicts that Apple's stock price will fall by approximately 17% in the next year based on last Friday's closing price.
In addition to Apple's continued weak performance, Barclays' report also predicts that the growth of Apple's service business will slow down, regulatory risks will increase, the return on the ecosystem will decrease, and warns that Apple's stock valuation is high. When the valuation multiple expands, the performance continues to be weak, and the stock price increase is not sustainable.
On Thursday of this week, Piper Sandler's chief analyst, Harsh Kumar, downgraded Apple's rating from &#34;overweight&#34; to &#34;neutral&#34; in a report, citing the belief that the weak macro environment will suppress Apple's demand.
However, Piper Sandler has set a target price of $205, which is about 11% higher than Wednesday's closing price, indicating that Apple's stock still has an 11% upside potential.
According to data compiled by the media, by 2024, Apple has become the least recommended large-cap tech stock. After Piper Sandler downgraded its rating, the proportion of analysts bullish on Apple reached a three-year low. In the past four quarters, Apple was the only large-cap tech stock to experience a decline in revenue. The average analyst expectation compiled by the media shows that Wall Street currently expects Apple's revenue growth rate for the 2024 fiscal year to be only 3.6%, with a profit growth rate of 7.9%.
As of the close of trading on Thursday, Apple's stock price has fallen by 5.5% in the three trading days this week, causing its market value to evaporate by over $150 billion compared to last Friday.

AAPL

According to the media, the US Department of Justice may file a wide-ranging antitrust lawsuit against Apple as early as the first half of this year, targeting Apple's strategies to protect its monopoly position. Earlier this week, due to concerns about Apple's demand outlook, two institutions downgraded Apple's stock rating within three days.

Three negative news in one week! After being downgraded, Apple faces the threat of an antitrust lawsuit.