Wall Street firm downgrades Apple as a billionaire sells most of his shares
The billionaire's fund took huge profits from its investment in Apple and is now buying shares in Google parent Alphabet.
Friday was a tough day for Apple on Wall Street. After opening higher and hitting $277.84 early in Friday's trading day, Apple declined to a low of $269 after Raymond James restarted coverage on Apple with a Market Perform rating That is a downgrade from the Outperform rating that the brokerage house put on Apple before it suspended its coverage of the tech giant's shares. While Raymond James didn't give a price target on Apple's stock, it did state that the company was overvalued as it trades at 31 times its forecast 2027 GAAP earnings per share. Apple closed Friday at $271.01, down 85 cents on the day.
Raymond James says that Apple's shares are currently overvalued
Raymond James analyst Melissa Fairbanks, in a note to investors, said, " Despite strong fundamentals and improving product cycles, we believe Apple's current valuation appropriately reflects these strengths, limiting near-term upside. While we acknowledge the company's leadership in consumer hardware, ecosystem, and services, with a highly sticky value proposition, we believe much of this value is already well understood by investors."
During calendar year 2026, Raymond James estimates that iPhone shipments will rise 3% followed by another 3% in 2027. The financial firm also sees Apple's revenue growing 8% during fiscal 2026 and 7% in fiscal 2027. For all of this year 2026, Raymond James sees Apple's full-year 2026 earnings coming in at $8.19 followed by $9.13 for the full-year 2027.
Apple will report its fiscal first quarter earnings on January 29th. The consensus forecast by analysts call for Apple to report GAAP EPS of $2.67 on revenue of $138.2 billion.
Buffet has been taking profits on Apple and is buying shares of Google parent Alphabet
Meanwhile, renowned investor Warren Buffet, who notoriously stayed away from investing in tech stocks until he started buying Apple shares in 2016, is in the news. Buffet continued to add to his position in Apple for seven years and by Q3 2023 he owned 915 million shares of the company valued at $176 billion. Over the last two years, Buffet has reduced his Apple holdings by 70% after earning $155 billion on his investment in the company. That included $97 billion in realized gains from selling some of his shares, profits of $50 billion on shares not sold, and dividends received totaling $6 billion.
Buffet's Berkshire Hathaway holding company has been raising cash and investing in T-bills, a position that a huge fund will take when they smell trouble for the market ahead. But Berkshire is now taking some of its excess funds and investing in Google parent Alphabet. This makes sense because Google is involved in the hottest sector of the tech market, AI.
Google's Gemini LLM (Large Language Model) has proved itself to be an important player in AI and Apple will use a custom 1.2 trillion parameter artificial intelligence model of Google's Gemini (LLM) to power the new and improved version of Siri expected to arrive this spring.
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