Apple Inc. (NASDAQ:AAPL) stock is up 0.29% in pre-market on Friday, and trading at $187.87. As investors are getting ready for Apple (AAPL)’s mid-September event for iPhone15, there are lot of risks that are associated with Apple stock according to analysts at Goldman Sachs.
The largest company in the world of $3 trillion market valuation, is expected to unveil the iPhone 15, the Apple Watch Series 9, the Apple Watch Ultra 2, and a new version of its AirPods Pro, according to a Thursday note from Goldman Sachs.
Analysts at Goldman expects slight price increases for most of Apple’s new products along with improved battery life, better cameras, and USB-C charging ports, when they hit the market in late September.
Overall, Goldman Sachs (GS) has a bullish view on Apple stock with a “Buy” rating and a price target of $222, showing potential upside of 18%. But at a time Goldman Sachs (GS) still sees some big risks for the company.
Another big stock investor Warren Buffet, who’s Berkshire Hathaway owns $180-billion stake in the Apple Company that is equivalent to half of its stock investment portfolio also weighing some fears about Apple stock price.
Goldman Sachs said it expects Apple to announce new Watch and AirPods Pro products along with a new iPhone.
There is always speculations spread in market during the new iPhone release dates ahead of the company’s highly-anticipated September 12 iPhone event.
These top 5 risks are discussed below as per Goldman Sachs, investors of Apple are at risk why?
According to Goldman Sachs’ Michael Ng, these are the risk for Apple and its investors.
1. Weaker consumer demand
When the dynamics of macroeconomic weakens it effect the demand of Apple products and services. The main source of revenue for Apple is iPhone sales as it gave 50% of its revenue through this product stream that is heavily dependent on purchases driven by upgrades. Macroeconomic headwinds increased the replacement cycles, then improved product durability, or lackluster product innovation could all negatively impact upgrade demand.
2. Supply chain disturbances
Apple products are supplied globally but their assembly occurs in China, but due to increased geopolitical tension, there are chances of disruptions to global trade. Apple (AAPL) has a strong supply chain network, it may depends on one or a few key suppliers for unique or hard-to-manufacture at scale parts.
3. Rising competition
It’s a fact that Apple Inc (NASDAQ:AAPL) is the largest and well-resourced company among its competitors but it’s not the leader in every business stream, but it has to face vigorous competition across personal devices and a variety of services. For example, in video streaming, Apple faces several key competitors that invest more heavily than Apple Inc in content.”
4. Regulatory risks
There are lot of regulatory scrutiny risks that result in weakening Apple’s competitive across all major markets worldwide, as it is mandatory to make its proprietary products or services available for competitors to use also.
5. Capital allocation
Tech giant has gone through various mergers and acquisitions, with prior knowledge or guarantee of success. And the history of Apple Stock repurchases is also comes under a negative thing for company due to deeper regulatory scrutiny.
Tech giant has gone through various mergers and acquisitions, with prior knowledge or guarantee of success. And the history of Apple Stock repurchases is also comes under a negative thing for company due to deeper regulatory scrutiny.
Goldman’s Ng pointed out that Apple’s strong brand loyalty, evidenced by its massive installed base of more than 1 billion iPhone users, so there are not only negatives to read in the coming days there are lot of bulls which can be witnessed in Apple stock price.
Most expectedly, on September 12, Apple is introducing the iPhone 15 phones, according to analyst Ming-Chi Kuo. As he had learned that most of assembly line and production issues for the new iPhone 15 are fixed. They also shared their expectations of colors –the two iPhone 15 Pro versions will be available in gray, white, black, and blue, while the iPhone 15 and iPhone 15 Plus will sell in black, pink, yellow, blue, and green.
