Apple Inc. (AAPL) experienced a sharp decline in its stock on Tuesday, following a significant downgrade from Jefferies, which shifted its assessment from “hold” to “underperform.” This downgrading comes amid troubling forecasts sparked by declining iPhone sales and disappointing demand for the company’s new artificial intelligence (AI) features expected in upcoming models. Analysts predict that these challenges may cause Apple to fall short of its quarterly revenue estimates.

Jefferies revised its price target for Apple, reducing it from $211.84 to $200.75 per share. The firm stated that their lowered forecasts stem from the sluggish performance of the iPhone market, which is facing headwinds not only from Apple’s own sales but from the general consumer electronics landscape as well. Jefferies analysts expressed concerns particularly around the performance of the anticipated iPhone 17 and 18, suggesting that slower adoption of AI technology will also hamper sales.

Apple's upcoming earnings report for the first quarter of 2025 is slated for release on Thursday, January 30, where investors will be eagerly looking for any signs of recovery or further declines.

In a contrasting view, JPMorgan maintained its "overweight" rating on Apple but trimmed its price target from $265 to $260. Analysts at JPMorgan highlighted several factors influencing their cautious stance, including the strength of the U.S. dollar, a limited demand for Apple products, and stagnating unit sales in the face of new AI implementations. Additionally, they warned about decreasing demand from China, where Apple has already started to lose its dominance as market competition intensifies.

The news comes on the heels of unsettling data from Canalys, which revealed that Apple lost its position as the leading smartphone seller in China last year, further compounding concerns around its market performance. The company’s latest iPhone models, lacking the newly launched AI features, seem to have struggled to attract Chinese consumers, signaling a potential shift in market dynamics.

As Apple navigates these turbulent waters, investors and market watchers will be keeping a close eye on the company's performance in the upcoming earnings report. Will Apple rebound or will it continue to slide? The stakes are high, and the tech giant is under pressure like never before. Stay tuned!