Investing.com -- Barclays has lowered its price target on Apple to $173, implying a downside of nearly 20% from the stock’s last closing price, and reaffirmed its Underweight rating.

The cut reflects growing concerns about the sustainability of near-term hardware strength and the broader macro environment heading into the second half of the year.

While Apple is expected to beat consensus for the March quarter, supported by foreign exchange (FX) tailwinds, iPhone pull-ins, and some Mac upside, Barclays sees the gains as temporary.

“We think that this is solely based on inventory pull forward to get ahead of tariff implementation and potential price hikes, and not related to real time demand trends which remain downbeat based on our checks,” analyst Tim Long said in a note.

They also expect some continued pull-in activity through April, but note a likely reversal in May and June.

For the second half of 2025 and into 2026, Barclays holds a more cautious view. It sees weaker demand for iPhones, wearables, and AirPods, driven by potential price hikes, slower AI adoption, and softer macro conditions.

The firm points out that Siri upgrades are delayed, AI features have been pushed out, and China continues to be a drag on sales.

“We are still worried about China, regulatory risk for Services, undefined AI strategy (Siri delay) and muted sell-throughs for IP16,” the note adds.

Barclays estimates that current iPhone production in India stands at 35 million units, but only a portion is directed to international markets, limiting the scope for tariff mitigation through regional diversification.

The bank is skeptical that upcoming earnings will bring clarity on true demand conditions, arguing that the market is “unlikely to get clearer answers in terms of demand trends,” which in turn caps multiples for Apple shares (NASDAQ: AAPL ).

Barclays’ new price target is based on a lower 22x multiple on estimated 2026 earnings, versus the previous 25x.

The bank also sees limited boost from capital returns, forecasting a 4% dividend hike and $110 billion in additional buybacks, roughly in line with the prior year.

At the same time, the analysts identified several upside risks for Apple, including a possible approval of an upgraded Siri within the next six months, progress on China AI partnerships, and a recovery in iPhone demand.