Apple leads tech sell-off after analyst warns of light iPhone 16 demand

• Apple shares were down 3% on Monday, leading a drop in the wider tech sector.
• The slide came after analyst Ming-Chi Kuo warned of light iPhone 16 demand.

Apple shares tumbled about 3% on Monday, leading a broader tech selloff that weighed on the Nasdaq Composite.

Apple's stock was trading at $215.90 a share, down 2.9% shortly after midday on Monday.

The decline came shortly after TF International Securities analyst Ming-Chi Kuo estimated the iPhone 16 series garnered 37 million pre-orders in its first weekend — nearly 13% short of last year's iPhone 15 debut weekend.

The lack of demand for the newest iPhone is likely because Apple has yet to roll out its most anticipated new feature, Apple Intelligence, Kuo said.

"One of the key factors for the lower-than-expected demand for the iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release," Kuo said in a Sunday note.

In an announcement last week, the company said Apple Intelligence will start rolling out in English next month, with more features to come in the months following. AI integration won't be available in other languages until next year.

Apple's downturn is pulling weighing on the wider tech space, with the Nasdaq Composite down 0.8% compared to the S&P 500, which is trading nearly flat, while the Dow Jones Industrial Average was up slightly.

Many top semiconductor names were tumbling Monday afternoon. Micron and Broadcom fell 4.5% and 3%, respectively, while Super Micro Computer, Inc dropped about 1% around noon ET.

Taiwan Semiconductor Manufacturing Company Limited, Apple's primary chip manufacturer, saw its stock down about 3%.

Apple's losses come after four months of gains, fueled by forecasts of higher iPhone sales with new AI features. The stock has gained around 12% this year, slightly behind the Nasdaq's 15% jump.

Kuo said that if shipments don't increase with the release of Apple Intelligence and holiday season promotions, the company will likely need to pivot its product strategy.

"In that case, I believe that Apple will implement more aggressive iPhone product strategies in 2025 to stimulate market demand," Kuo said.