Here's Why Apple (AAPL) Stock Is Falling Again Today

Shares of Apple (NASDAQ:AAPL) fell more than 3% on Monday morning, just days after the stock was hit by an industry-wide slump in tech stocks, after another analyst firm slapped the company with a ratings downgrade.

The new report comes from Mizuho analyst Abhey Lamba, who downgraded Apple from “buy” to “neutral” and lowered his price target from $160 to $150. Lamba also echoed recent concerns that investors might be over-anticipating the next iPhone device.

“We believe enthusiasm around the upcoming product cycle is fully captured at current levels, with limited upside to estimates from here on out,” the analyst said in a note.

It’s worth noting that the firm still believes the iPhone 8 will be a strong performer for the company—even possibly increasing revenue thanks to a higher expected price. Nevertheless, Mizuho does not believe the device will answer all of the questions that Apple is currently facing.

“Further gains on the stock could be limited until there is more meaningful expansion in the installed base, higher recurring revenue growth from existing users or deeper penetration of the installed base via new product categories,” the firm said. “We do not expect the new iPhone to turn any of these levers in the near-term.”

This downgrade marks the second analyst downgrade in less than a week for Apple. Last Monday, the stock was lowered from “overweight” to “sector weight” by analysts from Pacific Crest, who also cited concerns about the risk associated with its highly anticipated iPhone 8 launch.

Today’s slump also comes in the wake of an industry-wide selloff that affected several of the world’s largest technology companies on Friday. Apple shares fell about 4% on the day, and companies like Facebook (NASDAQ:FB) , Microsoft (NASDAQ:MSFT) , Amazon (NASDAQ:AMZN) , Alphabet (NASDAQ:GOOGL) , and Nvidia (NASDAQ:NVDA) also slumped.

The rough day for tech stocks was initiated by a hesitant report from Goldman Sachs (NYSE:GS), which expressed concern about the rapid rise in industry share prices so far this year. Replacing the traditional “FANG” acronym with “FAAMG”—Facebook, Amazon, Apple, Microsoft, and Alphabet—Goldman warned about a possibly concerning trend from investors.

“The fear is that if fundamental events cause volatility to rise, these same passive vehicles will sell and exacerbate downside volatility,” the firm said.

In other words, the concern surrounds the fact that traditionally cautious investors are shifting over to large cap tech stocks because of their consistent growth year-to-date. However, these investors are overlooking the inherent risks associate with tech companies, and when those risks inevitably expose themselves, these cautious investors will run away quickly.

According to our Zacks Sector Rank data, the overall “Computers and Technology” business has gained nearly 20% year-to-date before Friday’s slump. For now, the duration of the current pullback remains uncertain. At these levels, some investors might starting buying on the dip, but others could be worried about a second half of the year plateau for tech stocks.

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