Apple (AAPL) shares experienced a significant decline this week, following two analyst rating downgrades. Jefferies analyst Edison Lee downgraded Apple to “underperform” with a reduced price target of $200.75, citing anticipated weaker Q1 results due to sluggish iPhone sales and limited consumer interest in AI. Loop Capital also downgraded Apple to “hold” and lowered its price target to $230. Adding to the pressure, research indicates a decline in Apple’s iPhone market share in China, with Huawei Technologies surpassing Apple in sales. This week’s downturn saw Apple relinquish its position as the world’s most valuable company to Nvidia (NVDA).
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Arm Holdings Surges on AI Project Involvement
Arm Holdings (ARM) stock saw a substantial 16% increase on Wednesday after CEO Rene Haas highlighted the company’s participation in the US “Stargate” AI initiative. Haas emphasized the significant scale of investment in the project, which received $500 billion in private sector funding for AI infrastructure development. Key funders include OpenAI, Oracle (ORCL), SoftBank (9984.T), and MGX, with Nvidia as a technology partner. Shares of Nvidia and Oracle also rallied on the news. However, questions surrounding the project’s funding have emerged, with Tesla CEO Elon Musk expressing skepticism.
Electronic Arts Lowers Guidance, Stock Slumps
Electronic Arts (EA) shares plummeted nearly 14% in pre-market trading on Thursday after the video game giant reduced its fiscal year guidance. The company, known for franchises like EA Sports FC and The Sims, anticipates a mid-single-digit decline in live services net bookings for the 2025 fiscal year, revising its previous projection of mid-single-digit growth. EA attributed the downgrade to slower performance in its global football franchise and decreased engagement with its Dragon Age game. The company expects Q3 net bookings of approximately $2.22 billion and full-year net bookings between $7 billion and $7.15 billion.
Puma Shares Fall Short of Expectations
Sportswear brand Puma (PUM.DE) also reported preliminary results that missed analyst estimates, leading to a 17% drop in share price on Thursday. While Puma achieved 9.8% sales growth in Q4, reaching €2.29 billion, this fell short of the anticipated 12% growth. Net income for the year was €282 million, down from €305 million the previous year. Despite the short-term challenges, Deutsche Bank analysts maintain a “buy” rating on Puma, citing a positive three-year outlook. The company will release its full 2024 financial year results and 2025 outlook on March 12th.
Associated British Foods Adjusts Primark Revenue Guidance
In the UK, Associated British Foods (ABF.L) revised its full-year revenue guidance for Primark, lowering expectations from mid-single-digit growth to low-single-digits. This adjustment follows weaker like-for-like sales in the UK and Ireland during the autumn. Despite the slowdown in Primark’s performance, ABF expects the retailer’s adjusted operating profits to remain comparable to last year’s levels. The diversified food processing and retail group reported a modest 0.5% increase in Q1 revenue, totaling £6.73 billion. ABF’s diversified business structure helped mitigate the impact of Primark’s weaker performance on the company’s overall share price.
Other Companies Making Headlines
Several other companies made headlines on Thursday, January 23rd, including Harbour Energy (HBR.L), Mitie (MTO.L), SK Hynix (000660.KS), Hyundai Motor (005380.KS), GE Aerospace (GE), Texas Instruments (TXN), Union Pacific (UNP), CSX (CSX), Freeport-McMoRan (FCX), Western Digital (WDC), and McCormick (MKC). These companies represent a diverse range of sectors, highlighting the dynamic nature of the global market. For investors, staying informed about these market movers is crucial for making informed investment decisions.
