Tech demand slows as J.P. Morgan drops Apple and Qualcomm from top picks


On the first day of the month (Reuters): As a result of falling demand for smartphones, Apple (AAPL.O) and Qualcomm (QCOM.O) have been removed from J.P. Morgan’s list of most preferred stocks as a result, analysts said on Friday.

Amid warnings from analysts that rising costs of goods due to the Ukraine conflict and new coronavirus lockdowns in China could hurt smartphone demand in 2022, the brokerage has removed smartphones from its “Analyst Focus List.”

In the wake of the recent launch of the iPhone SE, analyst Samik Chatterjee believes that lower consumer spending and a slowdown in China’s gaming industry could put pressure on Apple’s services.

The Nikkei newspaper reported on Monday that Apple is already planning to reduce production of the iPhone and AirPods because of a decrease in demand.

Also read: Apple Maps will receive automatic danger notifications in an exciting new update

Even though the smartphone market for low-and mid-range Android devices is weak, Qualcomm is expected to bear most of its weight.

According to him, “there has been understandably a lot of noise around demand weakness in the global tech sector, but we believe the macro weakness seeping through the sector will impact the consumer end-markets more materially.”

Based on their long-term prospects, the brokerage continues to rate Apple and Qualcomm as “overweight,” which is the equivalent of a “buy” rating.

In an environment of slowing consumer demand, we have added to our list of network equipment companies, Arista Networks and Ciena, in the hopes of a more resilient demand for telecom and cloud-related spending, J.P. Morgan said on Wednesday.

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