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Apple's Q1 Earnings: Wall Street Watches iPhone Sales, AI Progress, and Services Growth

Apple’s Q1 Earnings: Wall Street Watches iPhone Sales, AI Progress, and Services Growth

Apple’s Upcoming Earnings Report Draws Wall Street Attention Amid China Concerns

As Apple prepares to release its fiscal first-quarter earnings report, Wall Street analysts are closely watching the tech giant’s performance, particularly about iPhone sales in China and the rollout of AI features. The report, eagerly anticipated by investors, comes amid growing concerns over slowing sales in the Chinese market and questions about the impact of Apple’s new AI-driven capabilities.

Despite these challenges, analysts see potential bright spots in Apple’s services division and profit margins during the crucial holiday quarter. Consensus estimates from Wall Street project earnings per share of $2.35 and revenue of $124.03 billion for the quarter.

JPMorgan analysts have expressed concerns about continued iPhone market share loss in China, citing local consumer subsidies as a contributing factor. The firm also notes that a strong US dollar poses challenges for Apple’s pricing strategy outside of new product launches. Nevertheless, JPMorgan maintains an “Overweight” rating on Apple stock, albeit with a lowered price target of $260.

Goldman Sachs presents a more optimistic outlook, anticipating a rebound in Apple’s performance mid-year. While the firm expects a 4% decline in iPhone shipments, it predicts revenue growth driven by higher prices. Goldman Sachs rates Apple as a “Buy” with a $280 price target, emphasizing the potential of future iPhone models and AI feature rollouts.

Wedbush analyst Dan Ives downplays concerns over weak China iPhone sales, suggesting they may be overstated. Ives expects Apple to meet revenue and profit expectations, supported by strong performance in its services segment. The firm rates Apple as “Outperform” with a $325 price target, highlighting the underappreciated potential of AI features.

Barclays offers a more cautious perspective, anticipating that solid sales in Services and Mac products will offset iPhone weakness. However, the firm expresses concern over the delayed launch of the iPhone SE4 and its potential impact on second fiscal quarter guidance. Barclays rates Apple as “Underweight” with a $183 price target.

Bloomberg Intelligence suggests that strong services revenue growth could counterbalance weak iPhone sales in China. The firm notes increased competition from Huawei and weak consumer spending trends in China but maintains a positive outlook for iPhone sales in the Americas and Europe.

As investors await Apple’s earnings report, the company’s performance in key areas such as China sales, AI feature adoption, and services growth will be crucial in determining market sentiment and future stock performance.