Goldman Sachs Drops Apple From Its Top Buy List Due To Concerning iPhone Sales
1min read Goldman Sachs Group Inc. has reportedly removed Apple Inc. from its top buy list citing the tech giant's poor stock performance and market concerns about faltering demand for its primary products.
The investment bank pointed out that concerns over long-term stagnation in iPhone sales were the primary reasons for this adjustment: According to data from market research firm IDC, Apple's iPhone shipments stood at 235 million units in 2023, up 3.7% year-on-year.
However, looking specifically at the Chinese market, in the fourth quarter of last year, Apple's Greater China revenue reached $20.82 billion, a year-on-year decrease of 12.9%.
Goldman Sachs had added Apple to its top buy list since June of last year, but during this period, Apple's stock performance showed little improvement.
Concurrently, over the same span, the S&P 500 Index realized a nearly 22% surge. Moreover, among the stock market's so-called Mag 7, it was only Tesla and Apple that had the worst performances.
Data shows that Apple's stock price has only risen by 1.76% from June 2023 to the present. Starting at the end of last year, the company's stock performance became even more dismal. Since December 14th of last year, Apple's stock price has dropped by 9%.
Goldman Sachs indicated that its preferred buy list is reviewed monthly and any stocks no longer viewed as top investment choices are removed.
Analysts comment that Goldman Sachs's selection for preferred stocks symbolizes a strategic shift in investing priorities, now favoring industries such as biotechnology and geology rather than tech giants like Apple. This decision reflects the bank's anticipation of larger growth potential outside of the traditional tech field.
Insiders have previously disclosed that the rationale behind this shift is Goldman Sachs's belief that industries related to geology and biotechnology will bring more profitable opportunities in the coming year.
However, despite being removed from the preferred stocks list, Goldman Sachs analyst Michael Ng maintained his buy rating on Apple. He holds the view that the market's focus on slower product revenue growth masks the strength of the Apple ecosystem and associated revenue durability & visibility.