Published: January 3, 2024 at 1:11pm ET
Apple appears to be stuck in an innovation rut, which is one reason why DA Davidson analysts are cautious about the stock.
Analyst Gil Luria addressed reports late Tuesday on neutral-rated Apple stock AAPL, warning that the company needs to “unstick” itself when it comes to creating exciting new things.
“Apple has…
Apple appears to be stuck in an innovation rut, which is one reason why DA Davidson analysts are cautious about the stock.
Analyst Gil Luria covers coverage of Apple stock.
AAPL
It issued a neutral rating late Tuesday, warning that the company needs to “unsettle” when it comes to creating exciting new things.
“Apple continues to introduce new form factors, especially in the wearables space, but the form factors for phones and watches seem to have plateaued over the past three to four years,” Luria wrote. “Meanwhile, other innovative companies are not only introducing new form factors (e.g. AI pins, AR glasses), but also challenging the shape of the phone itself (e.g. foldable phones).”
Apple stock has risen 47% over the past 12 months, but its performance has slowed recently, rising about 7% in three months and falling about 4% in one month.
Shares suffered their biggest decline in four months on Tuesday following the downgrade of Barclays.
See also: Amazon’s stock could be helped by this secret weapon in 2024, BofA says
Apple’s innovation woes have been especially evident lately as the company faces increased competition for its bread-and-butter business. Luria said that in China, “homegrown competition is an advantage,” while in India, given that consumers spend part of their income to buy expensive technology, consumers are “more attractive.” He points out that they are looking for “products”.
Will generative artificial intelligence be the catalyst for Apple’s next big thing? According to Luria, the company is in a position to “leverage our unparalleled walled garden consumer data set to deliver new apps and experiences. “However, it is doubtful whether the company will gain much traction in a virtual generative AI app store.
see next: Be careful as Nvidia and other stocks approach the ‘trough of disillusionment’ over GenAI, this analyst warns.
Apple shares fell about 1% in midday trading Wednesday, marking a third consecutive session of decline.
