Apple (AAPL) shares slid roughly 1.9% on Monday after Jefferies analyst Edison Lee downgraded the stock to Underperform (Sell) from Hold, slashing its price target from $285.56 to $263.66. The downgrade, which implies about 16% downside from Friday’s close, stems from supply chain checks revealing that Apple has quietly cancelled its ambitious all-glass iPhone project. The device, in development since at least 2025 and designed to mark the iPhone’s 20th anniversary in September 2027, was pegged with a blended retail price of around $2,060. Lee called the cancellation “a major setback to efforts to bring in higher-priced iPhones,” especially as memory costs rise.
The all-glass model was seen as crucial to pushing up average selling prices (ASP) across the Pro and Pro Max lines. With it off the table, Jefferies cut its compound annual growth rate estimate for iPhone ASP from 9.0% to 6.8% for fiscal 2026–2031 and trimmed earnings per share forecasts for fiscal 2028 and 2029. Lee now views the upcoming foldable iPhone (starting at $2,199) as “the only key driver of higher ASP and margin.” Meanwhile, separate rumors from Weibo tipster Fixed Focus Digital suggest Apple may raise iPhone 17 prices as soon as August 10, potentially moving the base model from $799 to $899 and the Pro from $1,099 to $1,199. This follows earlier hikes on Mac, iPad, Apple Vision Pro, and HomePod, with CEO Tim Cook previously describing memory chip cost pressures as a “hundred-year flood.” Apple has also reportedly scrapped plans to boost production capacity by 15% to 30%.
Jefferies further warned that Apple’s slow rollout of AI features makes it harder to justify adding memory, with higher-than-expected RAM costs potentially derailing even planned upgrades. The stock, trading at 35.93x earnings (above its five-year median of 30.6x), is considered overvalued by GuruFocus, which pegs fair value at $281.88. Despite a GF Score of 96/100 and strong profitability signals, insider selling has totaled $16 million over the past three months with no buys. The latest setback adds to pressure after a fiscal Q3 earnings selloff that wiped out $359 billion in market cap.
