JP Morgan analysts dropped the names of iPhone makers, Apple and Qualcomm from the list of most favored stocks following sluggish demand for smartphone devices.
The dropout from the brokerage’s ‘Analyst Focus List’ was made as analysts warned that sanctions involving coronaviruses in China and rising costs of goods due to the Ukraine conflict would hurt demand for smartphones in 2022.
According to analyst Samik Chatterjee, a moderation in consumer spending will dampen higher expectations from the recent iPhone SE launch while a slowdown in the economy in China could hurt Apple’s services.
He added that Qualcomm is also likely to bear the brunt of weakness in the smartphone market for low- to mid -spec segment Android handsets.
According to Chatterjee, there are many factors contributing to the weakness in demand across the globe technology but the macro weaknesses that permeate through the sector continue to affect the end -user market directly.
Meanwhile, the Nikkei press report also stated that Apple is already planning to reduce production of iPhones and AirPods due to the slowdown in demand.
Meanwhile, brokerages still rate Apple and Qualcomm as ‘worthwhile’ which is equivalent to a ‘buy’ rating based on long -term potential.
