Any concerns over iPhone sales are just a blip in the road for Apple: analysts

Apple (NASDAQ:AAPL) shares fell on Monday amid concerns that the iPhone 16 has seen softer-than-expected pre-orders, due in part to weak demand for the iPhone 16 Pro.

And while that weakness may impact the near-term, it isn’t likely to be a larger issue for the tech giant, Seeking Alpha analysts said.

“While many investors might be thinking that Apple’s aggressive valuation demands greater attention to the numbers, that is only half true,” Seeking Alpha Investing Group Leader Julian Lin said via email.

“Apple trades at a notable premium to mega-cap tech peers on a growth adjusted basis, but much of that premium is driven by the stickiness of its business. The stock might still experience near term volatility due to disappointing against expectations, but I do not expect it to hold the stock back over the long term.”

Wall Street’s concerns

TF International Securities analyst Ming-Chi Kuo said that pre-orders for the iPhone 16 line this past weekend were roughly 37M units, down about 12.7% year-over-year, with delivery estimates ranging between one and two weeks for the 16 Pro model, down from three to four weeks for the 15 Pro in its first weekend of pre-order.

Others, such as J.P. Morgan analyst Samik Chatterjee, also opined that the Pro models started off “modestly slower” than last year.

Buy the dip?

Seeking Alpha Analyst Leo Nelissen noted that the stock’s weakness is likely due to the fact it trades at 33 times earnings, leaving the room for error “very small.” However, in the long-run, the tech giant has continued to innovate and will continue to generate revenue from its user base.

“Given the bigger picture, I do not believe that Apple is in trouble,” Nelissen said, though he cautioned that Apple is “fighting a tougher battle” now than it has in the past.

Seeking Alpha Investing Group Leader Danil Sereda also opined that the weakness could persist in the near-term. But as Apple Intelligence is rolled out in broader fashion, the Tim Cook-led company will likely be able to deliver stronger results.

“I expect earnings revisions (albeit minor) to the downside, providing further opportunities for near-term weakness in the stock,” Sereda said via email. “But with Apple Intelligence not available for the iPhone 16 launch – which is probably the main reason for the weak pre-order data – I think the company will be able to deliver solid sales anyway in the medium term. And then it will also be easier to beat the consensus again, as [Apple] usually does.”