Key takeout
- Apple is set to release its quarterly results following the market close on Thursday.
- Approximately 75% of analysts monitored by Visible Alpha rate Apple stock as a buy or equivalent.
- Revenue growth of 4% is anticipated for iPhone makers, thanks to better service income and iPhone sales.
- According to Morgan Stanley, they don’t foresee Apple increasing AI infrastructure spending like Google’s parent company, Alphabet.
Apple (AAPL) is gearing up to announce its financial outcomes for the third quarter after the bell on Thursday. Many analysts seem optimistic about the stock of iPhone manufacturers, even with ongoing tariff concerns.
Among the 12 analysts tracking Apple stocks through Visible Alpha, nine have issued hold ratings, while one has a sell rating combined with a buy or equivalent rating. The general price target stands at nearly $233, suggesting a 9% rise from the current stock price of about $215.
Goldman Sachs is feeling bullish with a target of $251 for Apple’s stock, indicating their belief that the services revenue growth will remain steady. They anticipate that new AI features for messaging, calls, and live translations, such as in FaceTime, will spur demand for iPhone upgrades this fall.
The market expects Apple’s revenue from the June quarter to increase by 4% year-over-year to $89.34 billion. This includes projected iPhone sales of $40.23 billion, reflecting a 2% growth, and service revenue of $26.82 billion, marking an 11% increase.
However, an analyst from Morgan Stanley pointed out that Apple needs to navigate some critical concerns. They warned that the Trump administration could potentially impose Section 232 tariffs on Apple soon.
Morgan Stanley continues to hold a buy rating with a price target of $235, which slightly surpasses other analysts’ estimates. In contrast, HSBC maintains a hold rating and a target of $220, also citing regulatory uncertainty in their communication with clients.
Investors are also focused on advancements in AI or increased spending, although issues with Siri and limited availability in China have caused some delays.
Interestingly, while Google’s parent company, Alphabet, recently raised its capital expenditure forecast from $75 billion to $85 billion, Morgan Stanley doesn’t expect Apple to follow a similar trend.
