Apple (AAPL) shares are down over 18% from their record highs and are on the verge of entering a bear market, which by definition is a drawdown of 20% from the peak. The escalating trade war is taking a toll on AAPL stock, and while there was a relief rally in tech names on March 12, Apple was the only “Magnificent 7” constituent that closed in the red.

On Monday, March 10, Apple fell 4.85% as U.S. stocks crashed amid fears over the trade war and rising risks of a U.S. recession. It was AAPL’s worst day since Sept. 29, 2022, when it fell nearly 5%. In a previous article, I noted that Apple’s risk-return looks unfavorable. The stock’s selloff has only worsened amid mounting concerns. Notably, the crash in Apple stock – which is seen as a relatively safe bet during periods of turmoil – is not a good piece of news for the broader market either. 

In this article, we’ll examine what’s been pulling down Apple stock and whether the time is now ripe to bet on the iPhone maker.

Why Is Apple Stock Going Down in 2025?

Apple has been facing a flurry of headwinds, both macroeconomic and company-specific. 

On the macro side, President Donald Trump’s tariffs on China are a big concern as they will raise Apple's costs. So far, Apple hasn’t won any reprieve, and unless it passes on the higher costs to buyers, the tariffs will shave off its gross margins.

And passing higher costs to buyers is easier said than done. Firstly, U.S. consumer spending has been tepid and is expected to slow down further, which would limit Apple’s ability to hike prices. Secondly, iPhone 16 adoption has not been to the scale that many bulls would have hoped for, and raising prices might hurt sales further.

Apple’s China business is another casualty of the escalating trade war. Chinese consumers have been pivoting to domestic brands – whether it comes to cars or gadgets – and the trade war is not helping.

On a company-specific level, the rollout of “Apple Intelligence” features has been quite delayed. Most recently, the widely awaited Siri upgrade has been delayed. Delayed Apple Intelligence updates could further dampen iPhone sales, and analysts have been slashing their estimates for 2025 shipments.

AAPL Stock Forecast: Analysts Trim Their Targets

Wall Street analysts have also taken note of Apple’s woes, and earlier this week, Morgan Stanley lowered its target price from $275 to $252 while reiterating an “Overweight” rating. Notably, Apple faced three downgrades in January ahead of its fiscal Q1 2025 earnings report, and while there were some customary target price hikes following the “better than feared” earnings, none of these was significant, barring perhaps TD Cowen, which raised its target price from $250 to $290.

Overall, of the 36 analysts actively covering Apple, 17 rate it as a “Strong Buy” while another 5 rate the stock as a “Moderate Buy.” Ten analysts rate Apple as a “Hold” while the remaining four rate it as a “Sell” or higher. AAPL happens to be the second-worst rated Magnificent 7 stock after Tesla (TSLA), which has always been a polarizing name among sell-side analysts. 

Apple has a mean target price of $251.51, which is almost 16% higher than the March 12 closing price. Its Street-high and Street-low target prices are $325 and $184, respectively.

Should You Buy AAPL Stock or Wait?

Amid the recent fall, Apple’s valuation multiples have also corrected, and it now trades at 30.4x its expected earnings over the next 12 months. The multiple is similar to the stock’s average five-year multiples, even though it remains considerably higher than longer-term averages.

As the share of Services in Apple’s overall revenues has risen, the company’s gross margin also rose to a record high of 46.9% in the previous quarter. Rising contribution from the high-margin and relatively stable Services business is one reason Apple has seen a valuation rerating in recent years.

However, I believe that Apple might see earnings downgrade amid pressure on both the top line and the bottom line in the near term. The current valuation multiples don’t look enticing enough to trigger fresh buying in Apple stock, and I would wait for a better entry level.