Nasdaq slides as Apple slips and Fed rate cut looms

Apple shares fell more than two percent in morning trading on Monday after a series of analyst reports suggested that demand for the company's latest smartphone, the iPhone 16, is lagging behind the launch of last year's model during the same period.

The Street reported findings from analyst Ming-Chi Kuo of Citigroup, Jefferies and TF International Securities that suggested demand for the AI-enabled phone is lower than in 2023.

Kuo, who has accurately predicted Apple's moves in the past, estimated that about 37 million units were sold during the first weekend of iPhone 16 pre-orders, nearly 13% less than the corresponding weekend of the iPhone 15's launch last year. “The key factor is lower than expected demand for the iPhone 16 Pro series,” he wrote in a post on Monday.

Earlier this year, Kuo wrote a report saying that iPhone shipments would fall by as much as 15% year-on-year in 2024, due to falling iPhone sales in China and the emergence of generative AI-powered and foldable smartphones, which would put pressure on iPhone sales throughout the year.

Jefferies, meanwhile, noted that some iPhone 16 models are available for in-store pickup almost immediately, suggesting lower consumer interest. And Citi cited increasing competition in China and upgrade fatigue as some of the factors explaining weaker demand.

Apple's latest iPhone model is a key part of the company's AI strategy, which aims to bring powerful and intuitive new use cases to everyday users. Apple is touting its AI platform, Apple Intelligence, as one of the key selling points of its latest phones, as the software only runs on last year's iPhone 15 Pro or newer models.

Analysts hope this upgrade incentive will boost iPhone sales and increase the stock's value.