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Is Apple Capitulating?

Even one of the most bullish Apple analysts, Topeka Capital Markets Brian White is sounding negative these days. "The final February sales numbers for our Apple Monitor have been reported and the performance missed historical averages," White said in a note.

While nothing is certain, additional price target revisions, and perhaps a couple more downgrades on Apple, are in the cards in the near term. Sentiment has changed so violently in the past few months, it's scary. The company that was once the darling of Wall Street and Main Street, now can seemingly do no right. Investment guru Jeff Gundlach noted as such in a recent presentation that perhaps the mindset on Apple has gotten too bearish.

"I don't have an opinion on Apple now," Gundlach said during a Q&A session, but noted that Apple is "really oversold" in the short-term, and could go higher as its next move. He ended that by saying he does not think Apple shares will see $700 "anytime soon."

When Wall Street analysts move on a name, it is a herd mentality. The consensus right now is that Google (GOOG - Get Report) and Samsung are eating Apple's lunch. Current estimates from analysts polled by Thomson Reuters expect Apple to earn $10.22 a share on $42.9 billion in revenue this quarter. A year ago, Apple earned $12.30 a share on revenue of $39.19 billion, so revenue is projected grow just 9.5% year over year.

Samsung and Google both certainly have more buzz, especially as Samsung gets ready to launch its Galaxy S IV later this week. There is no denying that, but there is no denying either that sentiment is low on Apple either. This could be a sign of capitulation, a sign of giving up. That may very well be the sign that sentiment is poised to change.

The Cupertino, Calif.-based Apple is in a perceived rut right now, with the sentiment being that innovation is dead, and that Apple will never be able to best Google and Samsung. Apple needs to alter the perception of itself, or this cycle won't end. A deal with China Mobile (CHL) could change this, as well as a raised dividend and more return to shareholders.
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