Apple’s stock faced another decline on Wednesday as bond yields continued to rise. The technology giant is grappling with challenges in the sector and is under pressure to prove its readiness to compete in the realm of artificial intelligence.
In premarket trading, Apple was down 0.4% at $184.84, poised to extend a 3.6% drop from the previous day. The stock had been hit by a downgrade from Barclays and the rise in bond yields, which had a broader impact on the technology sector. Additionally, selling to harvest tax gains may have further exacerbated the situation.
Despite these setbacks, it is important to note that this is not a crisis for Apple. The company’s stock has only experienced a slight decline from its record closing high of $198.11 on December 14. Furthermore, over the past 12 months, Apple’s stock has risen by an impressive 47% until Tuesday’s close. However, the company, along with other influential stocks, faces the challenge of demonstrating sustainable growth that justifies further gains.
According to D.A. Davidson analyst Gil Luria, Apple needs to “unstick” itself in terms of innovation. Luria maintained a Neutral rating on the stock and set a target price of $166 in a research note on Tuesday. He emphasized that Apple must improve growth in its existing products while also introducing new ones.
In his note, Luria stated, “We believe Apple will experience moderate growth this year, driven by Services and easier Mac comparisons. Short-term factors that may influence fluctuations include a shorter quarter, looser supply chain comparisons, and Chinese restrictions.”
Artificial intelligence presents a crucial area for Apple to showcase its ability to innovate successfully. While there are reports of Apple planning to invest billions of dollars in Nvidia chips to enhance its AI efforts, particularly for an updated Siri digital assistant, the company has chosen to remain tight-lipped about its projects.
Luria noted, “While current applications may seem modest, such as message auto-complete, we believe Apple has the potential to leverage an unparalleled walled garden consumer data set to provide new applications and experiences.”
In conclusion, Apple’s fluctuating stock and challenges in the technology sector point to the importance of the company’s ability to innovate, particularly in the field of artificial intelligence. As the company faces these crucial tests, the market eagerly awaits Apple’s response.
