In China, Apple’s second largest market, iPhone sales fell 18% in the December ending quarter, according to Bloomberg.

Jefferies downgrades Apple’s stock, taking a cautious view on the next couple of quarters and on broader AI demand. Plus, Counterpoint Research notes sluggish China performance.

Apple shares fell Tuesday after Jefferies downgraded the stock to an “underperform” from “hold” on Monday, noting that flagging iPhone sales and weak demand for its artificial intelligence (AI) features in newer models would lead the tech giant to undershoot quarterly revenue forecasts.

Apple shares are close to key support. Breaking below $217 would bring $208 into play, according to technical stock market analysts.

Apple is known for selling popular hardware devices. The iPhone, which today represents about half of overall sales, even though it's a product in its 16th iteration, still essentially drives financial performance. However, the company has also developed and found smashing success with the MacBook, iPad, AirPods, and Watch.

Forecasts for weak iPhone sales and a weaker update of new artificial intelligence features prompted strategists led by Edison Lee to lower the rate to Underperform from Hold.

Apple (AAPL), and the stock has lost over 11% so far, extending its drawdown from all-time highs to over 14%. It also lost its status as the world’s largest company to Nvidia (NVDA), whose share have looked unstoppable over the last few years.