Apple’s Biggest Bear Isn’t Budging. Hear Him Out.

Apple stock is down nearly 20% this year. Analyst Craig Moffett rates it a Sell. (Sean Gallup/Getty Images)

It’s been an awful year for Apple investors. That’s just a fact.

The iPhone maker’s stock is down nearly 20%. UnitedHealth, Merck, and Salesforce are the only three stocks in the Dow Jones Industrial Average that fared worse in the first half of 2025.

Many on Wall Street are still optimistic, though. Nearly two-thirds of the 50 analysts who cover the stock have it rated a Buy, a higher percentage of bullish calls than for the rest of the market.

Of course, many analysts do tend, to quote a famous Monty Python comedy song, always look on the bright side of life.

Sell is considered a dirty four-letter word. But one analyst, Craig Moffett of MoffettNathanson, is saying it loud and clear. He remains unconvinced that Apple’s fortunes will improve anytime soon.

Moffett reiterated his Sell rating and kept his price target of $139, 33% below its current price and the lowest on Wall Street. The consensus price target for the stock is just under $228, 10% above Apple’s current price.

Why is Moffett so sour on Apple?

For a host of reasons, from tariffs and their impact on iPhone demand to worries about China sales, which he called a “riddle,” to the company’s stumbling on artificial intelligence, or as he puts it: “the still-pervasive sense that Apple is rudderless in AI.”

“When Apple reports earnings…one thing is certain. It will be unusually difficult to make sense of it all,” he wrote on Monday.

Being slow on AI, or at least the perception of being behind the eight ball, is a big reason why Apple stock has lagged behind many of its Magnificent Seven rivals, such as Microsoft and Meta Platforms.

And rightfully so, Moffett thinks.

“Greater uncertainty ought to mean lower multiples. And given the
asymmetry of the risks, we’d argue for lower estimates, as well,” he wrote.

Moffett pointed out his earnings estimate for fiscal 2026 is 14% below consensus and his price target is based on a multiple of 21 times those estimates. The stock currently trades at 27 times Wall Street’s considerably higher profit forecasts for next fiscal year.

The analyst also thinks investors are underestimating the potential hit to Apple’s giant services business from a legal fight with video game company Epic Games over fees in Apple’s App Store.

“Estimates for the Services segment also remain largely unchanged, despite significant adverse developments,” Moffett wrote. “We continue to believe that the next shoe to drop is that estimates still need to be cut, perhaps significantly so, for the remainder of the calendar year and beyond.”

Still, Apple’s shares are up this week in part because of a Bloomberg report that the company may use technology from OpenAI or Anthropic to boost its AI offerings for Siri. Apple didn’t respond to a request for comment about the report.

And the stock may have gotten a lift from the strong opening weekend for F1 The Movie, Apple’s original film starring Brad Pitt.

But Apple will need more than a big summer blockbuster to convince Moffett and other bears—not to mention skeptical investors—that the stock is worth buying again.

Write to Paul R. La Monica at paul.lamonica@barrons.com