Apple stock sinks on lower iPhone 16 pre-orders

Apple (AAPL) stock has moved lower on Monday after a Hong Kong-based analyst provided a sobering view of early iPhone 16 orders. AAPL stock has sold off about 3% at the time of writing.

Much of the market is getting lined up for the Federal Reserve (Fed) announcement on interest rates on Wednesday. There is still some uncertainty on whether a 25 or 50 bps cut is in the cards. Before that, Tuesday sees the release of US Retail Sales. The market expects a 0.2% MoM rise for August, but senior FXStreet analyst Yohay Elam thinks, "A surprising second leap would be good for the economy but bad for stocks."

The larger Dow Jones Industrial Average (DJIA) universe, however, is doing quite well. The index of 30 stocks is up 0.3% at lunchtime in New York, while the NASDAQ has moved 1% lower and the S&P 500 is off 0.2%. This comes after the Dow improved late last week as well. 

Apple stock news

TF International Securities analyst Kuo Ming-Chi, a once obscure analyst from a lesser known investment bank in Hong Kong, produced incisive insights in a new post on Medium over the weekend.

Based on the analyst’s estimates, Apple’s newest iPhone seems less of a tailwind than initially expected.

“iPhone 16 series first-weekend pre-order sales are estimated at about 37 million units, down about 12.7% YoY from last year’s iPhone 15 series first-weekend sales,” wrote Kuo. “The key factor is the lower-than-expected demand for the iPhone 16 Pro series.”

iPhone 15 model estimates from Kuo Ming-Chi (Source: TF International Securities)

The analyst, who is viewed as possibly the best Apple analyst in the business globally, said that intense competition in China has blunted demand, as well as the Apple Intelligence AI platform not being released in tandem with the iPhone 16.

If Apple Intelligence is rolled out in the fourth quarter but peak holiday promotions at the end of the year fail to spur iPhone 16 shipments, then Kuo believes that Apple will turn to “aggressive” strategies. Without saying such, this implies reduced prices that would hurt margins.

The iPhone 16 began pre-orders on September 13, while the full lineup will be released on September 20.

Apple stock forecast

Apple stock is in retreat after its August 29 range high, which happened to be a lower high. Therefore, it's natural that the market will look to notable support levels. The next one comes at $210 near the 100-day Simple Moving Average (SMA). After that the 200-day SMA comes near prior resistance turned support at $196.

AAPL daily stock chart