Concerns over tariffs and growth potential intensify as Apple faces consecutive downgrades from Wall Street analysts

According to Zhitong Finance APP, Apple (AAPL.US) faced consecutive downgrades from Wall Street analysts on Friday, as the recently released financial report intensified market concerns over tariffs and the company's growth potential.

Jefferies analyst Edison Lee downgraded Apple's rating to "Underperform," becoming one of the few analysts bearish on the iPhone manufacturer. Although Apple's performance met expectations, Lee stated, "The impact of tariffs will expand over time, leading to greater downside risk to earnings."

Apple's financial report indicated that the company's sales in China fell short of expectations and projected that tariffs would increase costs by $900 million. The company also stated that it expects the year-over-year revenue growth rate for this quarter to be "in the low to mid-single digits."

Jefferies described this as the "best-case scenario," as it assumes that U.S. tariffs on China remain at 20% and that no tariffs are imposed on imports from India and Vietnam. "These assumptions are unlikely to hold in the long term, especially in the case of non-negotiable industry tariffs."

Additionally, Rosenblatt Securities analyst Barton Crockett downgraded Apple's rating from "Buy" to "Neutral."

He stated, "What we are facing is a well-run company with decent but stabilizing growth, in urgent need of an exciting new product to reignite growth, while the company's current trading valuation is at a high level and during a period of turbulent tariffs and regulatory environment."

Crockett added that Apple's performance highlights the company's "excellent supply chain capabilities, and that iPhone demand is better than many are concerned about." However, "iPhone sales need a significant acceleration driven by artificial intelligence" for Apple stock to perform well.

Despite this, some analysts still praised Apple's financial report. Citigroup analyst Atif Malik stated, "The fundamentals remain intact, and the company delivered decent performance/guidance under a harsh tariff environment," but he holds a more conservative view on the outlook.

However, compared to other tech giants, Wall Street analysts' attitude towards Apple is relatively cautious. Among analysts tracked by Bloomberg, less than 60% recommend "Buy" on Apple stock, which is lower than for other large-cap stocks.

In stark contrast to Apple's financial report, Microsoft's (MSFT.US) performance was outstanding, driving its stock price up significantly on Thursday. This has positioned the software company's market value to potentially surpass that of Apple.

As of the time of publication, Apple was down 5% in early trading, while Microsoft was up over 2%