Apple stock was downgraded by a major Wall Street firm on Monday, as an analyst predicted that a radical iPhone redesign has been scrapped.

Jefferies analyst Edison Lee cut his rating on Apple to Underperform, the equivalent of a Sell rating, from Hold and slashed his price target on the shares to $263.66 from $285.56—one of the lowest on Wall Street.

Apple stock fell 2.46% on the news.

The downgrade hinges on the suspected cancellation of Apple’s all-glass iPhone. Although the project was reported to be in development as far back as 2025 and rumored to launch as early as 2027, Apple never commented on the speculation. However, the company quietly filed a patent application for a “six-sided glass enclosure” in 2019.

While Jefferies once viewed the release of an all-glass iPhone as plausible, Lee believes development has come to a halt. According to the analyst, supply chain checks suggest the project was cancelled due to low yield.

Lee views the decision as “a major setback to efforts to bring in higher-priced iPhones amid soaring memory costs.” Had it launched in September 2027 to commemorate the iPhone’s 20th anniversary, the device would have carried an estimated blended retail price of $2,060—higher than the average price of any previous model.

“More importantly, we believe the plan was to extend the all-glass features to future iPhone Pro and Pro Max models, further raising their average selling price and margin,” Lee wrote. He believes this would have been a crucial defensive move as the price of memory rises.

In the same breath, the analyst provided a conservative outlook on both Apple’s AI strategy and component costs for the iPhone 19 Pro Max, which is slated for release in 2027.

Lee noted that the slow rollout of Apple Intelligence makes it difficult for Apple to justify the expense of equipping its phones with more memory. Extra RAM is needed to run complex AI models directly on a device.

Heading into Monday’s session, Apple shares had gained more than 15% in 2026, narrowly pulling ahead of the Nasdaq Composite. The stock’s momentum was disrupted last month when underwhelming fiscal third-quarter earnings triggered a selloff that erased $359 billion in market value.