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Apple’s Eight-Week Losing Streak! Amid Storage Cost Concerns and Approaching Earnings, Goldman Sachs Contradicts Market Sentiment: “Buy the Dip Before Jan 29”

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Amid investor concerns over rising hardware costs, Apple (AAPL) shares have declined for eight consecutive weeks.

At the close of U.S. markets on Friday, Apple’s stock edged down 0.12%, bringing its weekly loss to nearly 4%. This marks its longest losing streak since May 2022.

(Apple stock price has dropped to levels last seen in mid-October)

Apple’s share price has retreated approximately 13.8% from its 52-week high of $288 set in December last year to around $248 currently. Furthermore, compared to the other members of the “Magnificent Seven” tech giants, Apple has seen particularly significant capital outflows since July.

(Net capital inflow trends for the Magnificent Seven)

The core trigger for this sell-off pressure originates from supply chain warnings. Recent pessimistic guidance from chip giant Intel sparked market fears regarding skyrocketing costs for storage components. Due to a surge in demand for AI hardware, memory chip prices are undergoing a sharp increase, leading to widespread concern that this will severely erode the gross margins of consumer electronics giants, including Apple.

However, despite the subdued market sentiment, Wall Street Insights notes that Goldman Sachs has maintained its “Buy” rating on Apple. The firm suggests that investors should ignore short-term noise and “buy the dip” ahead of the company’s fiscal 2026 first-quarter earnings report on January 29.

Goldman Sachs believes that a robust iPhone replacement cycle and the implementation of AI features will bolster performance beyond expectations.

Surging Storage Costs Spark Margin Fears

The market’s pessimistic outlook on Apple’s recent performance is primarily driven by the rapid rise in memory chip prices.

According to Wall Street Insights, Intel CFO David Zinsner admitted after the earnings release that while the company has secured supply for the first half of the year, storage pricing could become a challenge in the second half.

Data from Counterpoint Research has further fueled these concerns, forecasting that storage component costs will surge by 40% to 50% this quarter—driven by AI hardware demand—following a similar spike in the fourth quarter of 2025.

This trend poses a direct threat to Apple. IDC research indicates that storage components account for approximately 10% to 15% of the total Bill of Materials (BOM) for high-end smartphones like the iPhone. Benchmark analyst Cody Acree noted:

“Rising component costs, particularly those related to memory prices, could have unknown negative impacts on shipment volumes and revenue potential.”

Additionally, as memory manufacturers such as Micron(MU) and SanDisk(SAND) shift capacity toward more lucrative AI data center components, supply for traditional DRAM and NAND used in smartphones and PCs has tightened.

UBS analyst David Vogt warned in a report that while Apple’s supply agreements might mitigate the impact in the March quarter, risks will significantly increase in the June and September quarters as production for the next-generation iPhone ramps up.

Vogt estimates that memory chip shortages could hit Apple’s gross margin by 50 to 100 basis points. Based on this, UBS maintains a “Neutral” rating on Apple with a price target of $280.

Goldman Sachs’ View: Retracement is a Buying Opportunity

Despite inflationary pressures on the cost side, Goldman Sachs analyst Michael Ng argues that now is the optimal time to buy Apple stock.

Goldman has set a price target of $320 for Apple and expects the company to deliver an outstanding performance in the upcoming earnings report.

The firm forecasts that Apple’s revenue for the first quarter of fiscal 2026 will reach $137.4 billion, an 11% year-over-year increase. The iPhone business is expected to be the primary growth engine, with revenue projected to rise 13% year-over-year to $78 billion. This growth is driven by two main factors:

  1. Volume Growth: A projected 5% year-over-year increase in shipments, notably bolstered by a 26% surge in shipments in China, reflecting a strong recovery in a key market.
  2. Average Selling Price (ASP): An 8% year-over-year increase, indicating robust demand for high-end models.

Furthermore, Goldman Sachs emphasized the support for the stock price from the future product pipeline. The report noted that with demand for the iPhone 17 series expected to outperform its predecessor, and the anticipated launch of a foldable iPhone (iPhone Fold), Apple is shifting toward a “two-updates-per-year” release cycle.

Combined with upgrades to iOS and Siri, as well as the partnership with Google Gemini, the iPhone’s position as the preferred hardware gateway for the AI era will be further consolidated, thereby extending the upgrade super-cycle.

Wall Street Consensus and Valuation Outlook

From a valuation perspective, Apple currently trades at a forward P/E ratio of approximately 30x. While slightly above the industry average, analysts generally consider this premium justified given the stability of its earnings growth.

Goldman Sachs expects Apple’s first-quarter earnings per share (EPS) to reach $2.66, consistent with market consensus, while maintaining a steady gross margin of 47.7%.

Overall, Wall Street remains bullish on Apple. Out of 42 analysts covering the stock, 21 give it a “Strong Buy” rating. Evercore ISI reaffirmed an “Outperform” rating and a $330 price target, projecting a 17% year-over-year increase in iPhone sales.

Wedbush analyst Dan Ives provided a street-high price target of $350, describing 2026 as a “milestone year” for the full deployment of Apple’s AI strategic roadmap.

As the January 29 earnings date approaches, the market is waiting with bated breath to see if Apple can reshape its growth narrative through strong AI terminal demand, even under the shadow of rising storage costs.

The “Magnificent Seven” Once Drove the Market; Now, They Are Diverging

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The “Magnificent Seven” tech stocks, which once propelled the U.S. stock market to consecutive record highs, are increasingly moving in different directions. As investors grow more cautious regarding the Artificial Intelligence spending boom, the performance of this mega-cap portfolio has shown significant disparity over the past year.

Data from The Wall Street Journal reveals that in 2025, only Alphabet (GOOG) and Nvidia (NVDA) outperformed the S&P 500. The remaining five giants—Microsoft (MSFT), Meta Platforms (META), Apple (AAPL), Amazon (AMZN), and Tesla (TSLA)—all lagged behind the broader market. Fund managers note that this group is no longer synonymous with market leadership. David Bahnsen, Chief Investment Officer at The Bahnsen Group, stated:

“The correlation between them has collapsed. Today, the only thing they have in common is the trillion-dollar market cap label.”

This shift marks a new phase in the AI trade logic since the start of this bull market, as investors become more selective. Some capital is rotating toward sectors like healthcare, expecting AI dividends to spread, while others are focusing on chipmakers or energy companies. This reflects a market transition from general AI themes toward specific sub-sectors and tangible profitability.

The AI Arms Race Intensifies Internal Divergence

The AI spending frenzy is creating a structural divide within the “Magnificent Seven.” Amazon, Alphabet, Microsoft, and Meta have explicitly pivoted to become “Hyperscalers,” investing hundreds of billions of dollars to train new AI models, build data centers, and expand cloud computing infrastructure. Meanwhile, Nvidia continues to dominate the high-end AI chip market, providing the core computational power for the most advanced AI models.

In contrast, other members are falling behind. Apple’s stock underperformed the S&P 500 last year, as the iPhone maker faced market criticism for its cautious AI investment and slower progress relative to competitors. Tesla, once the market’s primary focus, has seen its stock performance significantly trail most of its peers as growth in electric vehicle sales slows down.

Michael Arone, Chief Investment Strategist at State Street Global Advisors, pointed out:

“They are at different stages of development. Previously, the rising tide lifted all boats; now, we are going to see clear winners and losers.”

Individual Investors Shift Their Focus

Individual investors, who were long-time stalwarts of the “Magnificent Seven,” are gradually turning their attention to other market segments. According to data from Vanda Research, the proportion of retail trading in these seven stocks last year was significantly lower than the levels seen in 2023 and 2024.

Taking Tesla as an example—a long-time favorite among retail traders—the decline in trading activity is particularly stark. In 2025, the average daily retail trading volume for the stock dropped by approximately 43% compared to its peak two years prior. Despite this divergence, these seven companies still wield massive influence over the market. According to Dow Jones Market Data, they collectively account for about 36% of the S&P 500’s total market capitalization, meaning their movements will continue to dictate the performance of the broader market.

Best Stocks To Buy Today: ASTS, MU,ASML

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As a new week begins, we are closely tracking market trends to provide multi-dimensional investment opportunities by identifying hot stock movements and top performers. Below is our selection for the Best Stocks To Buy Today.

Space Investment Fever Continues: AST SpaceMobile (ASTS) Surges Over 14% After Securing Prime Contractor Status for MDA’s “SHIELD” Project.

On the news front, U.S. satellite communications company AST SpaceMobile (ASTS) jumped over 14% last Friday. This followed confirmation that the company has been awarded prime contractor status for the U.S. Missile Defense Agency’s (MDA) “SHIELD” project. Formally known as the “Scalable Homeland Innovative Enterprise Layered Defense,” this project is part of the broader “Golden Dome” strategy, designed to build a resilient, layered defense system across air, missile, space, cyber, and hybrid warfare domains.

The award stems from the U.S. government’s public release of qualified bidders for the project on January 15, 2026. Chris Ivory, Chief Commercial Officer and Head of Government Business at AST SpaceMobile, stated: “Being selected as a prime contractor for the MDA SHIELD project is a significant validation of our unique, on-orbit dual-use technology and our growing capabilities in the defense sector.”

Micron Technology (MU) Gains 7.76% as It Warns Chip Shortage Will Extend into 2027.

Micron Technology (MU), a key supplier to Nvidia (NVDA), stated that the ongoing memory chip shortage has intensified over the past quarter. The company reiterated that due to the surge in demand for high-end semiconductors required for AI infrastructure, supply constraints will persist well beyond this year.

“The shortage we are currently seeing is truly unprecedented,” said Manish Bhatia, Executive Vice President of Global Operations at Micron, during an interview. This statement followed the groundbreaking ceremony for the company’s $100 billion manufacturing site on the outskirts of Syracuse, New York. This outlook reinforces similar forecasts provided by the company in December.

Bhatia pointed out that High Bandwidth Memory (HBM), essential for manufacturing AI accelerators, is “consuming a massive amount of available industry capacity, leading to significant supply shortages for traditional sectors like mobile phones and PCs.” He added that PC and smartphone manufacturers have already begun queuing up to lock in memory chip supplies for 2026 and beyond, while autonomous vehicles and humanoid robots are expected to drive demand for these components even higher.

ASML Holding (ASML) Rises Over 2% as Semiconductor Capital Cycle Re-accelerates

On Thursday, TSMC (TSM) released financial results showing a 35% year-on-year increase in net profit for the fourth quarter of 2025, beating expectations. The company also forecasted a Q1 operating margin of 54% to 56% (market estimate: 49.7%) and a gross margin of 63% to 65% (market estimate: 59.6%). These figures demonstrate that the chipmaker is benefiting significantly from the AI boom.

This signal was interpreted by the market as a vote of confidence in the sustained expansion of the AI industry. This directly ignited the stock prices of equipment giants like ASML and Applied Materials. Dutch photolithography leader ASML (ASML) hit a historic high, with its market capitalization surpassing the $500 billion milestone—becoming only the third European company to reach this valuation.

TSMC is one of ASML’s largest individual customers, and ASML’s lithography equipment is an “absolute necessity” for TSMC’s expansion and mass production of advanced process chips. Currently the highest-valued company in Europe, ASML’s core competitiveness lies in being the world’s only manufacturer capable of producing cutting-edge EUV lithography machines. TSMC requires this equipment to manufacture chips for everything from Apple (AAPL) smartphones to Nvidia (NVDA) AI accelerators.