U.S. consumer demand for Apple products showed signs of slowing in May, according to new data from KeyBanc Capital Markets.
Credit card transaction data reviewed by analyst Brandon Nispel suggest that spending for Apple hardware fell by 8% month over month in May, the weakest May data point since KeyBanc began tracking in 2016.
May’s figure was below the previous three-year average of a 10% increase in spending during the month. April tends to be the weakest month of the quarter, Nispel added, but May appears to be tracking lower as well.
“Our data is beginning to show some softening U.S. trends, which we believe poses risks to our estimates,” Nispel wrote. “We believe we could be too high for Mac due to an air-pocket in demand in anticipation of the new MacBook Air launch, as well as some modest downside from supply constraints and soft demand from China.”
Apple recently unveiled a few new hardware and software products at its keynote conference earlier this week, including new MacBooks with a new chip.
Concerns over the health of the consumer have increased over the last year as the Federal Reserve continues to tighten monetary policy to curb inflation, fueling fears of a looming recession. In recessionary environments, consumers tend to cut back on discretionary spending and luxury purchases, all trends that would not bode well for Apple. It doesn’t help that consumers have begun to favor spending on services rather than goods after two years of pent-up demand.
Analysts have generally remained optimistic about Apple stock despite these worries. Nispel, for example, maintained an Overweight rating on the stock, saying he continued to see growth and margin upside, as well as potential for new products and services.
But investors are more skeptical, with the stock declining 17% this year. In addition to overall recessionary fears, Apple has been struggling with supply-chain issues due to Covid-19 lockdowns in China that have slowed down manufacturing, making it difficult for the company to keep up with current demand.
Shares of Apple were down 1.07% to $146.638 on Thursday.
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