10:48 AM EDT, 06/04/2025 (MT Newswires) -- Apple ( AAPL ) faces "increasing fundamental growth headwinds and rising competitive threats," Needham said Wednesday in a report, downgrading the stock to hold from buy.

Needham cut its per-share earnings and revenue estimates for Apple ( AAPL ) largely due to lower China iPhone sales and higher costs because of tariffs.

AI-powered products from Meta Platforms (META) and Alphabet's Google (GOOG, GOOGL) threaten Apple's ( AAPL ) iOS devices, the report said.

As of Monday, Apple ( AAPL ) traded at a forward year 2026 price-to-earnings ratio topping 26, "which look expensive on several metrics," Needham said.

Apple ( AAPL ) "must have the catalyst of an iPhone replacement cycle, which we do not foresee in the next 12 months," the report said.

Apple ( AAPL ) shares rose 0.6% in recent trading Wednesday.

Price: 204.40, Change: +1.13, Percent Change: +0.55