Apple Inc. (NASAQ: AAPL) may not have been the most inventive of the technology giants in the last decade. But one thing Apple can almost always count on is support from Wall Street. Some analysts have had Buy and Outperform ratings on Apple for years, and the reality is that its stock very rarely sees a formal analyst downgrade.

On June 4, Apple was downgraded to Hold from Buy at Needham, and analyst Laura Martin also withdrew her $225 price target for the 12-month outlook. Apple’s stock was down about 19% year-to-date ahead of the downgrade, which is right at “bear market territory” for investors.

Needham’s downgrade is rather straightforward — Apple’s stock is just too expensive when it is trading at 26-times expected earnings. Another issue is that Apple’s annualized revenue growth of just 5% in its last quarter is significantly less than most Magnificent 7 peers.

Needham argues that Apple is in need of an iPhone replacement cycle catalyst, but Martin does not see that happening within the next 12 months. She even sees a better entry level for Apple’s stock down in the $170 to $180 level.

Remember the great AI hype that fizzled with Siri? This greatly cut the demand of iPhone sales and the outlook for iPhones is not looking hot for the rest of the year either ahead of the iPhone 17. Tariffs are expected to hurt demand for the smartphone market in general but the lack of an AI rollout and no set timing has put Apple in a bind. And on the tariff front, Martin’s base case is assuming that Apple will have to absorb the higher costs from the tariffs in an effort to keep its iPhone prices stable (and competitive).

Needham is also taking a recent development seriously after OpenAI, the ChatGPT developer, announced in May that would acquire Jony Ive’s new effort to make a new family of products powered by AI. The purchase price of $6.4 billion is argued to likely result in true alternative to smartphones, even if it may take multiple iterations of the initial product(s) before that comes to pass. The report also points out that big tech firms are building platforms with the intent of displacing Apple’s integrated hardware and software products because of Apple’s 15% to 30%

Not every analyst agrees, and as noted earlier Apple rarely sees big analyst downgrades. Two analysts defended Apple’s weak stock ahead of its World Wide Developers Conference.

BofA Securities’ Wamsi Mohan just defended Apple earlier this week by reiterating the firm’s Buy rating and a $235 price objective. BofA believes that Apple’s strategy of enabling AI processing directly on the devices will pay off over the long term more than the damage from its AI delays in recent months.

Citi also recently reiterated its Buy rating, pointing out that investor expectations are very low ahead of the WWDC event. UBS reiterated its Buy rating on June 1, and Goldman Sachs reiterated its Buy rating on May 21.

Apple’s stock closed down only 0.2% at $202.82 on Wednesday’s downgrade and it was indicated at $203.25 right at Thursday’s opening bell. Its 52-week range is $169.21 to $260.10.