Investment bank JPMorgan on Thursday cut its price target on Apple stock, citing growing challenges for the iPhone maker.
Analyst Samik Chatterjee reiterated his overweight, or buy, rating on Apple stock but lowered his price target to 230 from 240.
On the stock market today, Apple stock sank 0.3% to close at 201.
In a client note, Chatterjee said he sees lessening demand drivers in the back half of the year for Apple, especially around the upcoming iPhone 17. He has reduced expectations for that smartphone launch, given demand pull-in by some consumers who bought new handsets to avoid possible tariff-related price hikes in the first half.
Chatterjee also is factoring in continuing macroeconomic uncertainty.
"Our more bearish view in relation to the volume outlook for iPhone 17 series is in conjunction with our unchanged expectations for a stronger cycle in iPhone 18 series with the launch of a foldable smartphone as well as further progress in relation to AI features that have been long awaited and delayed," he said.
Folding-Screen Smartphones Coming
Apple's iPhone 17 build plans are tracking to 85 million units in 2025, down 9% from the iPhone 16 build of 93 million units in the same period last year, Chatterjee said.
"We forecast iPhone 18 series to see a stronger volume cycle, led by more material changes in the products including the launch of a foldable phone as well as broader AI-related features," he said.
Meanwhile, rival Samsung plans to announce folding-screen Galaxy smartphones at its next Unpacked event on July 9. Samsung's new handsets also will tout AI features.
Thoughts On Perplexity AI Deal
Elsewhere on Wall Street, analysts were chiming in on Apple's rumored interest in acquiring or partnering with artificial intelligence startup Perplexity AI.
In a client note, UBS analyst David Vogt said a Perplexity deal would be a relatively small financial investment but offers unclear benefits.
"While a partnership/integration of Perplexity with Apple's platform has been discussed for a year, an acquisition would be the largest transaction in Apple's history and comes with some risk," Vogt said. Apple likely would have to pay at least $14 billion, or more than 10% of its annual free cash flow, for Perplexity, he said.
"Moreover, Perplexity has faced allegations of unauthorized content use and plagiarism," Vogt said. "Therefore, given Apple's AI efforts have been a bit underwhelming, we believe a deal would likely be construed as defensive in nature, not a positive catalyst."
Vogt rates Apple stock as neutral with a 12-month price target of 210.
Apple Stock Has Middling Composite Rating
Loop Capital Markets analyst Ananda Baruah was more upbeat about a possible Perplexity deal. The acquisition would give the company needed AI talent in order to catch up with rivals in the market, he said in a client note Thursday. The deal would improve Apple's Siri digital assistant and provide a search alternative to Alphabet's Google.
Baruah rates Apple stock as hold with a price target of 215.
Apple stock has an IBD Composite Rating of 53 out of 99, according to IBD Stock Checkup.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
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