Apple (AAPL) gets hit with another downgrade this week, the iPhone maker's second since the start of 2024. Piper Sandler analysts downgraded Apple stock from “Overweight” to “Neutral” amid concerns about the tech giant’s iPhone inventory levels and waning demand from China.

Yahoo Finance Markets Reporter Jared Blikre breaks down Piper Sandler's note, deep diving into the market cap losses seen in Apple stock and other Magnificent Seven components in 2024 so far.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

MADISON MILLS: Now, we're going to move on to some market moves because Apple not catching a break this week. Piper Sandler hitting the iPhone maker with another downgrade, cutting its rating from overweight to neutral. This is the second one for the tech giant since the start of the new year. Apple shares falling today, potentially weighing down some of the indices. Jared Blikre is at our interactive watching the moves. Jared, what's that Apple movement doing today?

JARED BLIKRE: Well, we're seeing some more downdrafts. I'll check on the overnight in a little bit. But you can see Apple down here, 4.3% this year. And that's only two trading days. Let me put those premarket quotes, so we can see how much this is affecting. Down another 1%. So we're looking at year to date down about 5% on the open here.

Some notes from Kumar-- from Kumar. He's saying difficult comps from 2023. This is going to be paired with constant currency headwinds. They're expected to continue into the first half of this year 2024 with interest rates remaining elevated, so that just shows you how far the Fed reached into the market. Goes right now, Apple a huge bellwether stock-- the largest market cap in the entire world, really getting hit on the chin at the beginning of the year.

And this is kind of reminiscent of what happened last year. Here's another quote from our analyst over at Piper Sandler. We are concerned about handset inventories. Growth rates have probably peaked for units sales. And those growth rates, you take a look at revenue growth overall-- that peaked at about 50% on a quarterly basis year over year in 2021.

But the last time we've had what's expected now, four quarters of revenue shrink, gross shrinkage. The last time we saw that was 2001. And that was in the midst of the 2001 dotcom bust.

Now here's another one. This is a Barclays analyst. We're talking about what happened Tuesday. They said the iPhone 15 has been lackluster. And we believe iPhone 16 should be the same.

So overall, Barclays downgraded to underweight, so that's actually a negative. That's equivalent to a sell rating. The Piper action today makes it neutral. They do have a price target of 205. I should note that. That is above 184.25. That's where it closed yesterday. And that is well above the all time high, which is just sitting under $200 a share.

But you take a look at what's happened here. This is potentially a double top. So that's the technical breakdown that I'm reading a lot of people on Twitter and, well, I should say X now. But that whole discussion really encapsulated here, as we can see, a potential double top in the making.

One final point. I just want to point out how dismal tech has done this year. It was a leader last year. XLK down 3.6%. And here's one more chart for you. I'm going to show you a five-year chart, and you can see how we have this new nominal high. This is an all time high right now. But it looks like we are about to sink below this breakout line.

If we do, if we sink below by what is that about 170 or so, that presents a much bigger problem for the tech sector. And Apple being the most important in that way. Of course, we're going to be watching for further developments with respect to that stock.