Apple (NASDAQ:AAPL) stock remains one of the very few underperformers among Big Tech companies in 2024, losing roughly 10% year-to-date.
However, Evercore ISI analysts believe the sell-off in the iPhone maker’s shares may be “overdone.”
The broker has identified three main factors contributing to AAPL’s recent underperformance.
Firstly, investors' growing preference for AI-focused stocks like Nvidia (NASDAQ:NVDA) has led to a reallocation of funds away from Apple. Moreover, concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.
Lastly, ongoing regulatory issues continue to impact investor confidence in the world's second-biggest company.
“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift,” analysts said in a note.
“Sticking with our OP rating and $220 target,” they wrote.