iPhone outlook concerns trigger growing bearish sentiment on Wall Street: Six institutions issue sell signals for Apple, marking the highest since 2012

Pessimism towards Apple is rapidly accelerating on Wall Street.

Jefferies has just downgraded Apple stock to an “Underperform” rating, raising the number of institutions with equivalent “Sell” ratings to six—matching the highest level since 2012, reflecting deep market concerns about iPhone growth prospects.

Jefferies analyst Edison Lee pointed out in a research report that supply chain checks show Apple has cancelled its all-glass iPhone anniversary edition due to poor production yield rates. He believes this signal indicates that Apple faces challenges far greater than expected in boosting iPhone average selling price (ASP) through new form factors. Jefferies simultaneously cut Apple’s target price from $285.56 to $263.66, compared to a closing price of $313.33 last Friday.

Apple shares were already down 1.2% in pre-market trading on Monday, falling about 8% from their recent high. The direct trigger for this round of decline was the company’s disappointing sales guidance in its latest quarterly report—Apple cited component shortages as the reason, projecting a weaker-than-expected outlook.

The core logic behind Jefferies’ downgrade points to a bottleneck in Apple’s long-standing approach of relying on form-factor upgrades to drive ASP and gross margin growth.

As Edison Lee wrote in his report, the anniversary all-glass iPhone was cancelled due to substandard yields, showing that boosting ASP with new designs is “even more difficult than expected.” Against this backdrop, the foldable iPhone expected next month “is set to become the only key driver for ASP and margin growth over the next few years.”

However, Edison Lee remains cautious about this “only driver” as well. He notes that core component costs—such as memory chips—are surging, forcing the foldable iPhone into a much higher price bracket. “We still believe a phone this expensive will remain a niche product,” he said, and doubts its ability to drive overall company performance.

Jefferies’ downgrade marks the latest example of the recent wave of short interest in Apple on Wall Street. According to Bloomberg data, there are now six institutions with “Sell” equivalent ratings for Apple, tying the historical peak last seen in 2012. Last month, KeyBanc Capital Markets took the lead in downgrading Apple to “Underweight,” citing concerns about both demand outlook and valuation levels.

From a broader analyst perspective, Apple’s composite recommendation score (a measure combining buy, hold, and sell ratings) now stands at just 3.88 out of 5, a low not seen since 2019. Fewer than 60% of analysts recommend buying Apple—a stark contrast to other tech giants: Microsoft, Amazon, and NVIDIA all have buy ratings exceeding 90%.

In terms of share price, Apple closed at $313.33 last Friday, down roughly 8% from its recent high, and dropped another 1.3% in pre-market trading on Monday. As the cohort of “Sell” ratings continues to expand and the ASP growth story is questioned, Apple’s relative appeal among institutional investors is facing systemic challenges.