Apple (NAS100:AAPL) is the next big tech firm to report earnings on Thursday after the market closes, and recent events could signal a broader trend.
AAPL – Daily Chart
AAPL shares have recently crossed the 2024 high at $260. This is key for the earnings release. If the price moves below there, then a further correction could ensue. A mild bearish reaction could test the $260 level before resuming its upward trajectory. These are the support levels if the company moves higher from these results.
Apple’s earnings are expected to show earnings per share will be $1.78 and sales will be $102.17 billion, which is an improvement over last year. The company’s stock price fell in the early part of the year as analysts worried about the effects of trade wars on component prices.
Smartphone demand and Services revenue have contributed to the stock price, with an 8% year-to-date improvement. The company’s market cap jumped above $4 trillion due to robust iPhone 17 sales that beat the iPhone 16 launch.
Apple’s ecosystem and AI adoption across its products are expected to drive growth further this year, analysts said. Despite global headwinds, Apple has topped earnings estimates for 9 consecutive quarters. Apple’s potential to build on its AI momentum has prompted Wells Fargo analyst Aaron Rakers to lift his target on the shares to $290. However, due to strong competition from Huawei and Xiaomi in China, UBS analyst David Vogt goes lower with a $220 target.
Apple’s comments on AI integration, Services growth, and the iPhone 17 will be important for the stock’s trend for the rest of the year. The backdrop to the U.S.-China trade talks is also very important given the supplier issue.
If China and the U.S. were not in agreement on trade, it could reopen the rare-earth and Taiwan issues, both of which are key to chip production.
An area Apple may discuss on its earnings call is its recent decision to drop VR headsets. The company is planning to follow Meta and others into the smart glasses platform. Apple benefits from a bull market, but would do well to reassure investors that big and exciting things are coming for the iPhone maker.
