A potential slowdown in consumer spending could take momentum out of Apple's recent bullish run, according to JPMorgan. The firm removed Apple from its focus list, citing a tough consumer environment amid fears of a weakening economy. "We expect the moderation in consumer spending to temperate expectations for upside from the recent iPhone SE launch (although offset by product cycle momentum for iPhone 13) as well as limiting opportunities for upside in Services as gaming engagement in China moderates materially in relation to growth both from the pull back in consumer spending as well as tough compares," JPMorgan's Samik Chatterjee said in a note. Apple shares are down 1.7% year to date, outperforming the S & P 500's roughly 5% decline in 2022. The stock has also popped nearly 7% in the past month; it also posted in March its longest daily winning since 2003. JPMorgan has an overweight rating on Apple and a $210 price target, 20.3% higher than the stock's close Thursday. However, Chatterjee said the firm expects "the early impact on the Consumer from the challenging macro to drive further downgrade to expectations for end-demand in the markets of TVs, PCs, Smartphones and Autos." One area in which JPMorgan expects to see some resiliency is in the cloud and telecom industries, as customers in these spaces are "investing in their network." To that effect, JPMorgan added Arista Networks to its focus list. "We view spending from cloud companies as resilient to the macro headwinds given strong balance sheet and increasing demand for public cloud infrastructure," Chatterjee said. The firm has an overweight rating on Arista and a $160 price target, 15% higher than where the stock closed Thursday. Arista shares are down 3.3% in 2022. JPMorgan also removed semiconductor stock Qualcomm from the focus list and added telecom name Ciena . —CNBC's Michael Bloom contributed reporting.
The Apple logo is seen on a window of the company's store in Bangkok on February 14, 2021.
Mladen Antonov | AFP | Getty Images
A potential slowdown in consumer spending could take momentum out of Apple's recent bullish run, according to JPMorgan.