Big tech stocks likely to be under pressure again after Apple shares downgraded

After a drop in big technology stocks Friday caused the Nasdaq composite to post its worst week of the year, the shares were likely to come under pressure again on Monday after Apple shares were downgraded.

Mizuho Securities' Abhey Lamba downgraded the iPhone maker to neutral from buy on Sunday, saying the best case scenario is priced into the shares. The analyst echoed a common concern of investors taking profits in big technology stocks last week.

"The stock has meaningfully outperformed on a YTD basis and we believe enthusiasm around the upcoming product cycle is fully captured at current levels, with limited upside to estimates from here on out," wrote Lamba, who cut his 12-month price target to $150, which is about one dollar above where Apple closed Friday.

A Friday selloff pushed the Nasdaq down more than 1.5 percent last week, but the selling was worse among the biggest stocks. Apple, Alphabet, Microsoft, Facebook and Amazon lost nearly $100 billion in market value on Friday on no specific headlines, but rather investors questioning whether valuations for the names were getting ahead of themselves.

This is the second week in a row a Wall Street analyst has bailed on Apple on a Sunday evening. Pacific Crest downgraded the stock to start last week to sector weight. There are now six analysts with hold ratings on Apple and 25 who rate it a buy, according to TipRanks.com. Despite the valuation concerns, zero Wall Street analysts have a sell rating on the shares.

Source: Bloomberg Pro Terminal

Velizar Mirtov- Trader

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