Demand for the iPhone 18 Is Reportedly Weak. Is Apple's Stock in Trouble?

Apple (NASDAQ:AAPL)'s stock has been surging more than 30% in the past six months. It's been on a tear, as there's plenty of optimism of late surrounding the company and its new CEO, John Ternus.

However, with a heightened valuation also come high expectations. And that could potentially be problematic for Apple, as according to a recent report, it may be reducing production of its latest iPhone models due to low demand. Could the tech stock be due for a pullback before the end of 2026?

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Demand for the iPhone 18 Pro and Pro Max doesn’t appear to be strong

According to Nikkei Asia, demand hasn't been strong out of the gate for Apple's new iPhone 18 Pro and Pro Max models, to the point that the company is telling its suppliers to reduce production of components related to them. Higher prices may be impacting demand, although customers may also be holding off on making a purchase until Apple's foldable phone, the iPhone Duo, comes out later this month.

There may inevitably be multiple factors that are at play here, and this doesn't guarantee that Apple's iPhone sales will be weak across all of its models. But at the same time, investors shouldn't ignore the risk that perhaps higher prices may be impacting demand this time around. Apple has had to raise prices to offset higher memory costs. And while a foldable phone may be new and exciting for Apple customers, with it starting at $1,999, it's certainly not cheap, and it'll be a big test to see how strong the demand is at such a price point.

Apple's stock may be vulnerable to a correction

Next month, Apple will report its latest quarterly earnings numbers, and investors will have much more clarity on how strong demand is for the company's latest iPhones. It may not be easy to please Wall Street, however, as the stock is trading at more than 39 times its trailing earnings, which is a significant premium for a company that hasn't always been growing at a fast pace in recent years.

If iPhone sales come in light or there are even hints that demand may not be robust, the stock could experience a significant decline, given how expensive it is right now. While investing in the tech company is normally a good move for the long term, investors shouldn't ignore its valuation, as buying Apple stock at its current inflated levels could make it difficult to generate a strong return.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.