Investing.com – Shares of Apple (NASDAQ:AAPL) are set close more than 3% lower on Monday, as investors question whether the valuation of the technology giant has peaked amid a downgrade from investment bank Mizuho.
Mizuho downgraded the stock to neutral from buy and lowered its price target to $150 from $160, on the back of concerns that strong iPhone 8 sales in the upcoming production cycle, may have already been priced into Apple’s shares at recent levels.
"We believe enthusiasm around the upcoming product cycle is fully captured at current levels, with limited upside from here on out," Mizuho managing director, Americas research, Abhey Lamba, said in a Sunday note.
Lamba said consensus estimate of 30% growth in services revenue per user over the next two years “seems high”, as he remained adamant that growth in China is “likely to remain weak”.
The slump in shares of Apple, follows a broad-based tumble in the shares of mega cap U.S. technology companies last Friday.
Goldman Sachs released a report warning investors about the lofty valuation and low volatility of the top-five tech leaders, known as the FAAMG — for Facebook, Amazon, Apple, Microsoft and Alphabet.
“This outperformance, driven by secular growth and the death of the reflation narrative, has created positioning extremes, factor crowding and difficult-to-decipher risk narratives (e.g. FAAMG’s realized volatility is now below that of Staples and Utilities.” Goldman Sachs said in a note to clients.
At its current price of $144.25, Apple's shares have lost roughly 7%, following the 3.9% decline sustained in Friday’s session.