A slowdown in consumer spending could put a damper on sales of Apple's iPhone 16 handsets this fall, a Wall Street analyst said. Still, Apple stock rose on Tuesday.
"We believe there is a growing risk (albeit from a low-risk base) that the cumulative impact of inflation could drive weaker consumer spending and potentially dampen Apple Intelligence excitement with the (iPhone) upgrade cycle," Piper Sandler analyst Matt Farrell said in a client note Tuesday.
Apple stock is in record-high territory on the company's artificial intelligence plans, dubbed Apple Intelligence, he said. Plus, the company is seeing improving iPhone sales in China, Farrell said.
But the "good news is already priced into the stock," he said.
Farrell raised his price target on Apple stock to 225 from 190 but kept his neutral rating.
On the stock market today, Apple stock climbed 0.4% to close at 228.68. Earlier in the session, it reached a record high of 229.40.
Apple Stock Is A Recent Breakout
Artificial intelligence could be "a needle mover" for iPhone upgrades, he said. But consumers might not be in a buying mood when the iPhone 16 series comes out this fall.
"While one could argue that an iPhone is a must-have regardless of the macro, we are starting to see signs that consumer spending is slowing down," Farrell said. He noted disappointing earnings reports recently from consumer companies Nike, General Mills, Levi Strauss and others.
Elsewhere on Wall Street, KeyBanc Capital Markets analyst Brandon Nispel maintained his sector weight rating on Apple stock. In a client note, Nispel said Apple shares are "too expensive to go chasing."
On June 11, Apple stock broke out of a cup base at a buy point of 199.62, according to IBD MarketSurge charts.
Apple stock is on the IBD Tech Leaders list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
