Apple analyst sentiment hits five-year low after two downgrades

Apple Inc. was hit with a pair of downgrades on Thursday, in the latest sign of caution toward the iPhone maker, which has sharply underperformed its large-cap tech peers this year.

With the downgrades, Apple’s recommendation consensus — a proxy for the ratio of buy, hold, and sell ratings — has dropped to 3.9 out of 5, its lowest since early 2020, according to data compiled by Bloomberg. Just 55% of the analysts tracked by Bloomberg recommend buying the stock, which is extremely low among megacaps. Nvidia Corp., Microsoft Corp., and Amazon.com Inc., for instance, all have ratios above 90%.

D.A. Davidson cut the stock to neutral from buy, a move that follows product announcements earlier this week that failed to assuage concerns about the company’s position with artificial intelligence.

“While we were initially excited about the prospects of Apple’s role in the AI ecosystem and potential major upgrade cycle, it has become clear to us that neither of those are likely to come to fruition in the near-term,” wrote analyst Gil Luria.