The tech landscape is witnessing a potential shift as Microsoft (NASDAQ:MSFT), co-founded by Steve Jobs’ once archnemesis, inches close (3%) to overtaking Apple as the world’s largest company. And if Jobs were still with us, Apple employees would likely be hearing his signature, “This is shit.”

Last year,AAPL

rose 48%, which sounds impressive until you realize it was the worst-performing stock among the Magnificent Seven and had underperformed the Nasdaq index’s 55% return. Bloomberg notes that Apple is also the “only big tech firm to see revenues contract for the past four quarters.”

Poison Apple: To start 2024, Barclays and Piper Sandler analysts downgradedAAPL

, making it the least-loved Big Tech stock on Wall Street. Just 33 analysts gave it a “buy” rating on the company, significantly less than the 62% average among its peers (BBG).

• Both banks cited weaker hardware sales like the iPhone for their downgrade — saying “poor sales of the iPhone 15, particularly in China” is a bad sign for the iPhone 16.
• According to D.A. Davidson analyst Gil Luria, Apple is in an “innovation rut” preventing it from “generating exciting new things.”

Can Apple turn a corner in 2024?

Apple will need to make up for its declining hardware sales — which had fallen considerably as slowing iPhone sales and cratering iPad and Mac demand dragged the company through its longest revenue slide in 22 years. Analysts hope that its fast-growing services business and new mixed reality headset will be the answer.

• On Monday, Apple unveiled plans to launch the $3,499 Vision Pro in the US on Feb. 2 — which Morgan Stanley analysts expect could generate up to “$8B of revenue by year three,” putting it “below AirPods, but above the Apple Watch.”
• Analysts view the company’s fastest-growing services business, representing nearly half of Apple’s total revenue, as a bright spot.

Money machine: Apple’s more profitable services revenue grew 6.3% year-over-year (YoY) to a record $22.3B last year. Despite weaker revenues, Apple still holds a crucial advantage — its ability to generate a massive amount of cash. And don’t be so quick to discount big tech giants. Remember whenMETA

was down over 70% in 2022? A major AI announcement might be all it takes to change the game.