Data from wireless carrier AT&T this week indicated sluggish U.S. smartphone demand, which presents a headwind for Apple stock.
AT&T's second-quarter report on Wednesday showed relatively soft demand for new smartphones, including Apple iPhones, UBS analyst David Vogt said in a client note.
AT&T's postpaid subscriber handset-upgrade rate is at a record low, coming in at 2.9% for the second quarter. That compares with 3.1% in Q2 last year and 3% in the first quarter.
On Monday, Verizon also reported record low smartphone upgrades.
Apple will release its June-quarter results next Thursday after the market close.
Analyst Has Neutral Rating On Apple Stock
Vogt reiterated his neutral rating on Apple stock with a price target of 190.
On the stock market today, Apple stock fell 0.5% to 217.49.
Vogt said his rating and price target on Apple reflect "a challenging growth backdrop, higher rates, and undefined AI strategy."
Other Wall Street analysts say the near-term weakness in iPhone sales could be a sign of pent-up demand for Apple's next-generation smartphones, due out in September. The upcoming iPhone 16 series handsets are designed to run on-device artificial intelligence applications, according to media reports.
Apple Gets Price-Target Hike
Elsewhere on Wall Street on Thursday, Baird analyst William Power reiterated his outperform rating on Apple stock and raised his price target to 240 from 200.
"Following years of slowing upgrade rates, including new lows for AT&T and Verizon this week, we believe Apple Intelligence could provide a much-needed upgrade catalyst, boosting revenue and EPS growth meaningfully," Power said.
He raised his iPhone sales forecasts for fiscal 2025, which starts in October.
"With smartphone upgrade cycles lengthening for years, resulting in a much older iPhone base, the 1 billion-plus iPhones globally could be primed for an upgrade catalyst," Power said.
Apple stock is in the IBD Tech Leaders list.
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