The Dow Jones Industrial Average (DJINDICES:^DJI) was down nearly 1% at 12:15 p.m. EDT Thursday as technology stocks logged another bad day. The number of Americans filing jobless claims dropped in the week ended Sept. 12 to 860,000, a sign that the economy is slowing recovering. But that rate remains far above pre-pandemic levels, and a lack of new economic stimulus could derail the economic recovery in the coming months.

Apple (NASDAQ:AAPL) and salesforce (NYSE:CRM) dragged down the Dow on Thursday despite good news for both companies. Apple stock received a price target bump from an analyst due to 5G iPhone optimism, and Salesforce scored with its IPO investment in data software provider Snowflake (NYSE:SNOW).

5G text over earth.

Image source: Getty Images.

Apple sinks despite analyst optimism

Apple didn't disclose anything about its upcoming 5G iPhones during an event earlier this week. The company focused instead on the iPad, Apple Watch, and services. The iPhone launch this year will be delayed by a few weeks compared to previous years due to disruptions caused by the COVID-19 pandemic, so Apple will likely reveal the new devices in a separate event.

Analysts at Jefferies are optimistic about the 5G product cycle despite the delays. On Thursday Jefferies raised its price target on Apple stock from $116.25 to $135. Shares currently trade around $110.

Jefferies sees the current environment as "very positive" for Apple. Indeed, the company has enjoyed strong demand for its gadgets during the pandemic, surprising Wall Street with an exceptional quarterly report in July. Total revenue jumped over 10%, driven in part by unexpected growth for the iPhone.

While Jefferies admits that upgrade rates for smartphones in the U.S. are at historic lows, a combination of an aging iPhone installed base, marketing from wireless operators, and new features on the 5G iPhones could drive a strong upgrade cycle.

There's one lingering question: How much did economic stimulus in the early months of the pandemic help Apple's sales? Direct payments of $1,200 went out to most Americans earlier this year, and a $600 weekly federal supplemental unemployment benefit was in effect until the end of July. That extra cash, combined with lower spending on travel and people spending more time at home, likely helped boost demand for Apple's pricey gadgets. Without new stimulus, demand later this year could take a hit.

Shares of Apple failed to benefit from the analyst price target bump, down 1.6% by early Thursday afternoon. The stock has been struggling ever since carving out a new all-time high at the beginning of September. Shares have now tumbled roughly 20% from that high.

Salesforce scores big on Snowflake IPO

Subscription software provider Salesforce, which was added to the Dow as part of the most recent shake-up, saw its stock slump along with Apple's on Thursday. Shares of Salesforce were down 2.5% by early afternoon despite a big win related to the blockbuster initial public offering of Snowflake.

In its S-1 filing, Snowflake disclosed that Salesforce Ventures had agreed to purchase $250 million of Class A common stock in a private placement at the IPO price. Berkshire Hathaway joined Salesforce and agreed to the same deal. Snowflake went public at $120 per share and saw its stock roughly double in the first day of trading.

That represents a windfall for Salesforce, at least on paper. There's just one problem: Snowflake stock is mind-bogglingly expensive. At a market cap of roughly $65 billion, shares trade for over 130 times annualized revenue based on the first six months of 2020. The company is growing fast, but this is a bubble-level valuation, especially considering that Snowflake is not even in the vicinity of turning a profit.

Salesforce investors aren't putting any value on the company's Snowflake gains, likely for good reason. While shares of Salesforce are still up nearly 50% since the start of the year, the stock has slumped more than 13% from its 52-week high.