For the first month of the year, the stock market has clearly been cautious regarding Apple. The iPhone developer has failed to live up to its market value and has been ragging relative to the competition. Yet, despite Apple (AAPL) seemingly losing pace with the overall tech sector, experts say that China holds the keys to changing everything.
The company has struggled with a plethora of bad news abounding its operations in 2025 so far. Moreover, with US President Donald Trump implementing a series of tariffs abroad, it is facing increased questions. However, there could be a turnaround coming, and its potential lies in the hands of that key market.
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Apple Being Outpaced in Tech Sector as Experts Point to China as Potential Turning Point
Earlier this month, Wall Street analysts were shocked by giving Apple a $184 price target. That projected the stock would remarkably crash more than 20%. A lot of those worries came from the increase in geopolitical tensions and the company’s underperformance so far this year.
That has only continued as February approaches its midpoint. However, that doesn’t mean it can’t change. Indeed, Apple (AAPL) may have lost pace with the rest of the tech sector, but experts believe that China holds the keys to change everything for the stock in 2025.
Compared to its competition in big tech, Apple has sported weak growth. Its revenue has fallen in five of the last nine quarters. Moreover, it is projected to grow by just 4.9% in the fiscal year 2025. That is less than half the 11.6% growth trajectory respected for the tech sector as a whole, according to Bloomberg.
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Yet, it could turn things around if it was able to make headway in China. To date, sales in the region have not been great. Conversley, there is a belief that the increased presence of AI tools could see that turn the corner.
“Apple’s level of exposure to China is a risk relative to much of the rest of the market,” chief equity portfolio manager at Northwestern Mutual Wealth Management, Matt Stucky, told Bloomberg. Specifically, he noted that the company could be affected by a brewing trade war with the US.
“However, if AI iPhones are a success, that could mean steady growth over the next several years,” he added. He certainly isn’t alone. Morgan Stanley analyst Eirk Woodring notes that AI tools are “a critical catalyst for Apple’s competition standing in China.” Moreover, headway in this market could see the stock regain market share in the region that has denied its prominence throughout the last year.