Will Apple stock crash below $200 amid China's App Store probe

Core Viewpoint - Apple is facing potential regulatory challenges in China regarding its App Store practices, leading to a decline in its share price during pre-market trading [1][3][4]. Group 1: Stock Performance - As of February 4, Apple’s stock (AAPL) closed up 2.1% at $232.34, but fell 2.8% in pre-market trading to $226 [2]. - The current sell-off in Apple’s stock is attributed to reports of a possible investigation by China's market regulator into the company's App Store fees and payment policies [3]. Group 2: Market Context - China is Apple's second-largest revenue source after the U.S., crucial for iPhone sales and its manufacturing ecosystem, but faces rising competition from Huawei and stricter regulations [4]. - The ongoing U.S.-China trade tensions and previous tariffs have added uncertainty to Apple's market position [4]. Group 3: Stock Price Predictions - Finbold's AI tool predicts that Apple’s stock will not drop below $200, with an average predicted price of $233.83, indicating a 2.22% increase from the current price [5]. - The most optimistic forecast from Claude 3.5 Sonnet suggests a price of $276.50 (+20.87%), while the most conservative prediction from ChatGPT-4o estimates a price of $210.00 (-8.2%) [6]. Group 4: Financial Performance - In Q4, Apple reported earnings per share of $2.40, surpassing estimates of $2.35, and revenue of $124.30 billion, slightly beating forecasts of $124.12 billion [8]. - Analysts project steady revenue growth, with Q1 2025 revenue expected at $94.32 billion (+3.93% year over year) and full-year 2025 projected at $409.51 billion (+4.72%) [9]. Group 5: Analyst Ratings - Wall Street analysts generally maintain a bullish outlook on Apple, with Bank of America maintaining a 'Buy' rating and a price target of $265, while Evercore ISI reaffirmed a 'Tactical Outperform' rating with a $250 target [10]. - Conversely, Jefferies downgraded Apple to 'Underperform' with a target of $200.75, citing weak demand for smartphone AI and potential delays in product development [11].