Apple Inc. is weathering a politically charged storm as a growing number of analysts openly doubt the company’s best days lie ahead. That’s after the tech giant recently killed its own $225 price target. At this point, it recommends that the $170 to $180 range represents more favorable purchase opportunities for investors. This amendment reflects a prudent approach in light of the risks posed by decelerating growth rates and increased competitive pressure.
As we noted recently, long-time media analyst and Needham & Co. She thinks that given Apple’s growth is quickly stagnating, it doesn’t deserve a 28 times or better valuation of its forward earnings. The company’s performance, particularly in the App Store, faces additional challenges as customers increasingly find ways to circumvent Apple’s 15% to 30% commission on in-app purchases.
Analysts’ Perspectives on Apple’s Growth
Martin’s analysis highlights a troubling trend for Apple, suggesting that the company’s growth is expected to remain moribund in the coming years. What’s more, Counterpoint Research is singing this song, forecasting that Apple is going to experience more global decline than its competitor Huawei by 2025.
“Despite AAPL’s premium valuation, it is growing [revenue] and margins slowest among its Big Tech competitors,” – Laura Martin
Perhaps more significantly, this forecast comes at a time when the global smartphone market is experiencing considerable headwinds. Against this backdrop, Counterpoint Research has adjusted its 2025 global smartphone growth forecast down by half. They credit the decline largely to a softening market in the U.S. and China. Liz Lee, Associate Director at Counterpoint Research, noted that large markets are getting hit hard. At the same time, other parts of the country will be booming like never before.
“We still expect positive 2025 shipment growth for Apple driven by the iPhone 16 series’ strong performance in Q1 2025. Moreover, premiumization trends remain supportive across emerging markets like India, Southeast Asia and GCC – these are long-term tailwinds for iPhones,” – Liz Lee
Market Dynamics and Resistance Levels
Despite those headwinds, Apple stock has been surprisingly stable, recently running into technical resistance at mid-$190s. In May, this same level was identified as an area of support. What was once a catalyst has morphed into a gate keeping that stifles upward mobility. Analysts warn that this may be a sign of a coming retreat in stock returns.
The effect of outside influences should not be underestimated, either. The Trump administration’s tariff policies have contributed to increased prices, further complicating Apple’s market position. President Donald Trump blasted Federal Reserve Chair Jerome Powell for waiting too long to cut interest rates. Such a delay risks disrupting what remains of favorable economic conditions and consumer spending.
Here’s what to make of Friday’s Nonfarm Payrolls (NFP) disappointment. All this weak data may provide the Federal Reserve with justifiable excuses to implement interest rate cuts. These moves could impact overall market confidence and in turn hurt tech stocks including Apple.
Strategic Adjustments and Future Outlook
With this foray into alternatives, Apple is positioning itself very strategically. The company said it will use Alibaba’s Qwen large language model to power its Apple Intelligence service in China. In fact, earlier this year Alibaba Chairman Joseph Tsai announced a major new partnership. This latest move emphasizes Apple’s intent to strengthen its tech defenses in the Chinese market, which remains critical for Apple’s operations.
Even with the pressures of competition and the changing nature of markets, optimism still exists around the iPhone’s ability to drive success. Positive shipment growth led by the upcoming iPhone 16 series as strong consumer demand continues in fast-growing emerging markets.
Apple is evolving along with a field that changes every day. How the company addresses these challenges will be critically important to restoring investor confidence and enabling long-term value creation.