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Apple Inc. (NASDAQ:AAPL) has had a turbulent beginning to 2025, with its shares approaching a significant level that could signal further losses if breached, according to analysts.
What Happened: Since the start of the year, the tech behemoth’s stock has plummeted by 11%, making it the weakest performer in the ‘Magnificent 7’ group. This downturn is in stark contrast to the S&P 500, which has seen a 4% gain, reaching a new record high.
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Apple is experiencing its most challenging beginning of the year since 2008. The stock’s drop has brought it near the 200-day moving average, a critical technical indicator seen by many traders as a long-term support level.
“When you get names starting to flirt with it or start to break below it, you kind of lose confidence that the uptrend of that name is still intact,” Todd Sohn, an ETF and technical strategist at Strategas Securities LLC, told Bloomberg.
Why It Matters: Apple’s position is now precarious. Until recently, it was the world’s most valuable company and had the largest weighting in the S&P 500 Index. However, amid its decline, Nvidia has now overtaken Apple in market value.
Despite Apple’s selloff, the S&P 500 has continued to rally. However, if other major tech stocks start to decline, it could signal trouble for the bull market, now in its third year. “It definitely has the potential to create some more risk for those major indices. If we see that downside follow-through that we’re anticipating, that makes it more challenging, of course, for those indices to shrug it off,” said Katie Stockton, managing partner and founder of Fairlead Strategies LLC.
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Apple is scheduled to release its quarterly earnings on January 30, after market close, an event that investors are closely watching. Despite the stock’s current performance, analysts remain optimistic about Apple’s future. Laura Martin, an analyst at Needham, believes that Apple’s dependence on the iPhone remains, but services and wearables offer growth potential. Additionally, Wamsi Mohan of Bank of America Securities predicts that Apple’s Q1 earnings might not miss a beat, despite a softer iPhone cycle.
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