Apple products on desk by Ake Ngiamsanguan via iStock
Data from Counterpoint Research showed that iPhone sales for May rose to the top spot in China, with global sales growing 15% year-over-year during April and May. This was driven by Apple (AAPL) returning to growth in two of its largest markets: China and the U.S.
The report also highlighted that Apple smartly navigated tariff hurdles and achieved double-digit growth across other key markets, such as Japan, India, and the Middle East, further cementing its dominance on the global stage. So, should you buy Apple at this juncture?
Commanding a hefty $2.96 trillion market cap, Apple (AAPL) is well-known for its iPhones, iPads, Macs, AirPods, Apple Watches, and Apple Vision Pro, as well as its software platforms. However, even with its market dominance, the company landed in hot water this year, facing mounting scrutiny amid tariffs and trade tensions. As a result, Apple is shifting some of its iPhone production to India, which helps the company diversify its supply chain and keep costs low.
This move, however, hasn’t been appreciated by President Donald Trump, who has threatened the company with a 25% tariff on its products if it does not shift its manufacturing back to the U.S. Apple’s stock is down 9.7% over the past 52 weeks and has suffered a 21.9% hit year-to-date. The stock reached a 52-week high of $260.10 late last year and is currently 24.8% below this high. The company attempted to regain some ground through its annual developer conference, from June 9 to June 13.
Apple showcased its new “Liquid Glass” design and its new upgraded OS, which will be named iOS 26. Unfortunately, investors were not overly enthusiastic about the outcomes, as they had expected more from the company in the artificial intelligence (AI) field. While the company may have hoped for a lift in its stock after the conference, the stock actually declined. Over the past five days, Apple’s stock has tanked almost 3.5%.
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In early May, Apple disclosed its fiscal 2025 second-quarter results (quarter ended March 29), which were hotter than expected. The company reported revenue of $95.36 billion, up 5% from the prior year’s period. The top line also surpassed the $94.66 billion revenue that Wall Street analysts were expecting.
The company’s most important segment is undoubtedly its iPhones. During Q2, its iPhone sales increased by 2% year-over-year to $46.84 billion, surpassing the $45.84 billion that analysts had expected. Mac revenue rose by 7% year-over-year to $7.95 billion, topping the expected $7.77 billion, while iPad revenue increased by 15% to $6.40 billion, higher than the expected $6.20 billion.
Two of Apple’s broad segments did not meet the standards, however. Its wearables, home, and accessories segment revenue declined by 5% year-over-year to $7.52 billion, falling short of the estimated $7.95 billion. Apple’s services segment’s revenue, which deals with Apple TV and its App Store, while increasing by an impressive 12% to $26.65 billion, was lower than the expected $26.7 billion.
Apple’s gross profit of 47.1% was aligned with Wall Street analysts’ expectations. The company reported a quarterly EPS of $1.65, up 8% annually and surpassing the $1.63 consensus estimate.
However, the results were not enough to turn investors’ outlook on Apple’s stock. While there were limited impacts from the tariffs during Q2, the company expects the tariffs to add $900 million to its costs in the current quarter. Apple expects its top line to grow “low to mid-single digits” in Q3.
Analysts expect Apple’s earnings to continue on its slow growth path. For the current quarter, its EPS is expected to increase marginally year-over-year to $1.41. For the current fiscal year, EPS is projected to grow 5.3% annually to $7.11, while it is expected to increase 7.9% to $7.67 in the next fiscal year.
Concerns about tariffs are not enough for analysts to turn their backs on Apple’s stock. Wall Street still shows a lot of faith in the abilities of this tech giant. Morgan Stanley analyst Erik Woodring reiterated the “Overweight” rating on the stock and its $235 price target, which shows the investment firm’s continued belief in Apple.
Wedbush analyst Dan Ives reiterated his “Outperform” rating on the stock, alongside a $270 price target. Ives sees reason in Apple’s measured approach to AI. He believes that while Apple is lagging behind its competitors, it has begun laying the groundwork for long-term development. BofA Securities also maintained its “Buy” rating on Apple and the $235 price target, indicating that the firm believes Apple’s fundamentals remain strong.
Overall, Wall Street analysts are still reasonably positive about Apple’s prospects, giving it a consensus “Moderate Buy” rating. Based on 37 analysts’ ratings, 18 analysts have given the stock a “Strong Buy,” three rate the stock as a “Moderate Buy,” 13 analysts consider the stock to be a “Hold,” one analyst gives a “Moderate Sell” rating, and two analysts rated it “Strong Sell.”
The consensus analyst price target of $230.75 indicates potential upside of 18% from current levels. Meanwhile, the Street-high target of $300 suggests an even greater leap of 54% from here.
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On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
