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For Apple (NASDAQ:AAPL) shareholders, it feels like Groundhog Day (the start of 2025 all over again), with a fresh, big-name analyst downgrade served up on the new year’s first day of trading. Undoubtedly, a slew of analyst downgrades helped nudge shares of Apple into a rough trough in the first half of last year.
And while one analyst downgrade does not necessarily mean a wave will follow as trading volumes pick up now that traders are back from their holiday break, I do think that investors may wish to get ready for increased turbulence as we enter a period of seasonal sluggishness. In many ways, the current climate feels eerily similar to that one Apple navigated at this time last year. And if more downgrades come flowing in, perhaps the first half of 2026 might be a bit of a doozy for the iPhone maker.
It’s too easy to be negative on Apple at the start of 2026
Undoubtedly, it’s all too easy to be negative on Apple in January, given we’re quite a long way from the next iPhone keynote and there are timelier Magnificent Seven stocks to pursue as we head into the chilliest part of winter. With no Santa Claus rally this year and a bit of sell-side negativity regarding Apple to ring in the new year, perhaps it’s time to be a buyer rather than a seller now that Apple shares have shed close to 7% from their December peak.
Of course, the January slump could accelerate as investors look past the strong iPhone 17 sales to end 2025, the surprise potential from the holiday season, as well as the big Gemini-fuelled Siri overhaul that looms this Spring.
Perhaps such positives are easy to overlook, given the rather lofty valuation (35.9 times trailing price-to-earnings (P/E)) going into the year, the production cut on Apple Vision Pro, recent churn in upper management, and uncertainties as to whether CEO Tim Cook will retire this year. All considered, it certainly feels uneasy to put new money into shares of Apple to start off 2026, even if it’s mostly rumors that traders are going by.
With shares dipping around 1.4% on Monday’s session on a day that tech stocks saw a swift recovery, it feels like Apple stock is destined for another year of market-trailing results, even with the catalysts (Siri AI overhaul and new products) that might work their way into the stock sooner rather than later.
Raymond James’ Apple downgrade might add to recent volatility in shares
Raymond James doesn’t seem to think there’s all too much upside left in the Cupertino giant in the new year, even with big AI features just a few months out. The firm has a Market Perform rating (the equivalent of a neutral), down from Outperform. What’s behind the downgrade? A stretched valuation, priced-in iPhone strength, the potential for slower sales growth, and skepticism over the looming AI catalyst, as well as the coming foldable iPhone.
While there’s no arguing that Apple stock goes for a premium relative to historical averages, I think it’s a mistake to discount the impact of the Siri overhaul and its impact on device upgrades through the year. If the Siri upgrade goes well, I think it could power Apple stock to big surprises through the year. Additionally, it’s too early in the game to count the foldable iPhone out of the game.
Could the new form factor be a flop like the ultra-thin iPhone Air? There’s definitely the possibility. And while foldable smartphones represent a small slice of the market, I would look for Apple to change that, especially if its foldable proves miles better than what currently exists.
Why the foldable iPhone could be a game-changer
Either way, I think it’s clear that consumers want more firepower and features from their devices, rather than something that’s simply thinner and lighter with compromises. When it comes to the foldable, I see it as a device that could help kick off one of the strongest upgrade cycles in years.
A foldable iPhone isn’t just a new, more easily recognized kind of status symbol (unfold your new iPhone and everyone will see you’ve got the latest and greatest); it’s a powerful form factor that may very well mark the next big jump as consumers gravitate towards bigger screens with fewer compromises.
Notably, foldables tend to have a reputation for being fragile, quite thick, with screen creases, and less-than-ideal interfaces. The foldable iPhone has been hard at work to make a device that’s better than what exists on the market. And if Apple can ship a durable, relatively thin device with a creaseless screen and an intuitive interface, I think foldables could reach an inflection point.