Jefferies Cuts Apple Stock to 'Underperform' Amid Cancelled Flagship iPhone and Rising Memory Costs

Jefferies has downgraded Apple's stock to 'Underperform', citing several concerns that may impact the tech giant's profits. The main reason for this bearish call is the cancellation of Apple's special 20th-anniversary all-glass iPhone, which was expected to be released in September 2027.

This phone was supposed to be a flagship product with a high price tag of around $2,060. However, due to low yield, it has been canceled, marking a significant setback for Apple's plans to introduce higher-priced models amidst rising memory costs.

The cancellation is expected to lower the compound annual growth rate (CAGR) of iPhone average selling prices (ASP) from 9.0% to 6.8% between FY26 and FY31. This will also affect future iPhone Pro and Pro Max models that were set to inherit these all-glass features.

Jeffries estimates that the cancellation will result in lower profit margins, as memory chip costs are rising, squeezing Apple's profit margins across its whole product line, not just iPhones.