Apple has been on a tear, but shares could soon sink as customers tighten their purse strings due to rising device prices, according to KeyBanc. The bank downgraded the technology name to underweight from sector weight. It also put a $250 price target on shares, suggesting 21% downside from Monday’s close. “We see: 1) slowing iPhone builds with price increases, weak U.S. upgrades, and changing device subsidy models; 2) ’27 expectations that likely need to move lower for Mac, iPad, and Wearables; and 3) as unit growth likely slows, so will the growth in Apple’s user base, likely pressuring Services,” analyst John Vinh said Monday in a note to clients. “We think AAPL is too expensive for this to occur.” Apple trades a 35 times forward earnings, according to the note. That’s well above the S & P 500’s 20.7 multiple, per FactSet. Shares of the iPhone maker have risen nearly 17% year to date, outperforming the overall market, as investors have sought to gain demand-side exposure to the artificial intelligence boom. On Monday, the stock hit an all-time high of $323.45. AAPL YTD mountain Shares are up nearly 17% in 2026. However, Apple may struggle to maintain that momentum as it raises its iPhone prices. As prices rise, U.S. mobile phone carriers are likely to stop subsidizing their clients’ upgrades to more expensive devices, leading consumers to hold onto their older devices for longer instead of buying a new phone every two years, according to KeyBanc. “All three U.S. carriers have publicly spoken about transitioning away from device subsidies,” Vinh wrote. “We think the U.S. carriers will increasingly look to pull back on device subsidies as the device cost increases, which will likely: 1) lower upgrade rates; and 2) support longer average holding period of devices, the opposite of the trend we have seen recently.” Expectations for price increases on iPhones and other Apple devices will also likely affect the company’s ability to build out its robust user base, hurting its services vertical, Vinh added. KeyBanc estimates Apple’s Services revenue will slow to 7% growth by the end of 2027 compared to the Street’s consensus of 12%, per the note. The bank’s call goes against Wall Street. Of the 48 analysts covering Apple, just two have an underperform rating on the stock, LSEG data shows.
Apple just hit an all-time high. KeyBanc says investors should sell the tech giant
