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In premarket trading on the stock market today, Apple’s share price experienced a minor decline, settling at 202.59. According to Martin's analysis in a client note, Apple faces a potential downside risk of $20-30 per share, compared to an upside of merely $15 per share from its current price.

In her analysis, Martin expresses a preference for Google's parent company, Alphabet, and Amazon over Apple. She highlights that most Big Tech competitors have articulated strategic visions that can surpass Apple’s ecosystem. A significant concern for Apple is its limited use of Generative Artificial Intelligence (GenAI), which can only enhance its ecosystem. Conversely, Google leverages GenAI to not only improve its Android ecosystem but also enhance its cloud business. This incremental revenue from its cloud services provides Google with the advantage of increased profitability and faster product enhancements.

Martin also noted that Apple's lack of a cloud business relegates GenAI to a cost rather than a revenue and margin driver, potentially leading to a valuation discount in comparison to Google and Amazon. Additionally, AI innovations present a hardware market that could challenge Apple's dominance in devices like the iPhone. Martin pointed to companies like Google and Meta Platforms, which are developing smart glasses, and OpenAI's acquisition of a company led by former Apple designer Jony Ive, who is working on a personal AI device.

For Apple stock to perform well, Martin stressed the importance of an iPhone replacement cycle, which she does not anticipate occurring within the next 12 months. To date, Apple stock has seen a decline of approximately 19% through Tuesday’s close.