Goldman Sachs Group Inc. has decided to remove Apple Inc. from its list of top buys due to the underperformance of Apple's stock and concerns regarding weak demand for its key products.
Despite being part of the 20-25 member "Directors' Cut" version of Goldman's conviction list since its introduction in June last year, Apple's share price has shown minimal change during this period, contrasting with the S&P 500 Index, which has seen a nearly 22% increase.
Following its removal from the list, Apple's stock dropped by 0.6% on Friday.
In comparison to its Magnificent 7 peers, Apple has significantly lagged behind, outperforming only Tesla Inc. The primary cause for concern revolves around worries of a sustained slump in iPhone sales, particularly amidst ongoing economic challenges in China.
Goldman Sachs explains that its Directors' Cut list undergoes monthly reviews, leading to the removal of stocks that are no longer considered top investment ideas.
Analyst Michael Ng, despite Apple's removal from the list, maintains a buy rating on the company. The belief is rooted in the notion that "the market's focus on slower product revenue growth masks the strength of the Apple ecosystem and associated revenue durability & visibility," according to the broker's report.
Paraphrasing text from "CNBC" all rights reserved by the original author.
