A five-star Wall Street analyst has downgraded Apple (NASDAQ: AAPL) stock to ‘Hold’ from ‘Buy’, citing weaker iPhone shipment expectations and rising memory costs that threaten earnings growth.
Loop Capital analyst Ananda Baruah cut the price target from $370 to $330, a 10.81% reduction that implies 3.77% downside from Apple’s closing price of $342.
Notably, the analyst had expected Apple to recover most of the units lost after cutting its September and December quarter iPhone shipment estimates by 10%.
The firm initially attributed the reductions to supply constraints involving memory and processors rather than weaker consumer demand. However, its latest supply chain checks indicate that Apple is unlikely to recover the 13 million iPhone shipments cut in the second half of 2026.
Apple’s revised iPhone shipments
Loop Capital now expects Apple to ship 79 million iPhones in the December quarter, down from its previous estimate of 85 million. It also reduced its average selling price forecast for the quarter to $1,123 from $1,239.
For calendar 2027, the firm lowered its iPhone average selling price estimate to $1,096 from $1,235 and cut its iPhone revenue forecast to $285 billion from $315 billion. Its 2027 earnings-per-share estimate also fell to $9.76 from $10.11.
Beyond shipment concerns, Baruah flagged potential gross margin pressure as memory costs continue to rise.
Higher component costs could weigh on Apple’s profitability, particularly if the company cannot offset the increases through pricing or operational efficiencies. This adds to concerns about weaker iPhone revenue and the stock’s elevated valuation.
The analyst reduced Apple’s normalized earnings-per-share estimate to $11 from $12. The revised $330 price target applies a price-to-earnings multiple of 30 times, compared with the approximately 36 times at which the stock was trading, a five-year valuation high according to the firm.
AAPL stock forecast
The downgrade comes after a strong rally in Apple shares, increasing pressure on the company to deliver earnings growth that supports its valuation.
However, not all analysts share Loop Capital’s cautious outlook. For instance, Bank of America maintained a ‘Buy’ rating and a $370 price target on October 19. Evercore ISI also raised its price target to $380 in September while maintaining an ‘Outperform’ rating.
Despite the mixed analyst outlook, Apple’s underlying business remains profitable. The technology giant reported $109.4 billion in revenue for its fiscal third quarter ended June 27, 2026, up 16% year over year, while diluted earnings per share increased 29% to $2.02.
Its reported gross margin was 50.1%, including an approximately two-percentage-point benefit from tariff refunds.
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