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Hedgeye Flags Apple Stock: 23% Drop Possible?
10 Jul
Summary
- Hedgeye identified Apple as a new short idea, predicting a 23% stock decline.
- Revenue expectations for fiscal years 2026 and 2027 may already reflect future growth.
- Concerns exist over China's market share growth pace and competition from Huawei.
Hedgeye, a financial analysis firm, has identified Apple as a new short idea, indicating a potential 23% decline in the stock's value. The firm's concern stems not from a weakening business, but from the belief that investor expectations for future growth are already too high.
Analyst Felix Wang noted that revenue forecasts for fiscal years 2026 and 2027 have significantly increased, likely due to anticipated iPhone upgrade cycles. Hedgeye suggests this advantage may already be fully incorporated into current analyst predictions.
Furthermore, Hedgeye raised concerns about Apple's performance in China. While the company continues to gain market share, the pace did not accelerate in the June quarter. Expectations for double-digit growth in Greater China for fiscal years 2027 and 2028 are questioned, with Huawei identified as a persistent competitive risk.
Apple shares have seen a 15% gain this year, trading at approximately 34 times forward earnings. The crucial factor for investors will be whether iPhone demand can sustain the company's premium valuation and current growth projections.
