Apple Earnings Preview: iPhone Maker Defies Market Sell-off as Earnings Approach
Apple Earnings Preview: iPhone Maker Defies Market Sell-off as Earnings Approach
Will the company return to all-time highs as the market plunges?
- Apple is set to report first-quarter fiscal results on Thursday.
- The iPhone maker has held up well during a stock sell-off amid news of a new Chinese AI model.
- Apple’s technical structure
Apple (AAPL) is set to report first-quarter fiscal results on Thursday after the market close. The iPhone maker will hold a conference call at 5:00 p.m. EST.
The announcement can sway market sentiment, given it is one of the largest stocks by market capitalization in the United States.
The earnings come amid a U.S. stock market sell-off following a China-based artificial intelligence model that reportedly outperforms ChatGPT while at the same time using less energy and older hardware.
Apple stock was up nearly 4% through mid-day trading today, while the broader market was down 2% based on the S&P 500 Index.
Traders view Apple as a potential beneficiary of the new AI developments, given the company aims to integrate AI into its iPhone models instead of directly developing the technology. This could make DeepSeek or similar AI models easier to run on users’ mobile devices and potentially eliminate the need to connect to servers to run AI programs.
Still, Apple stock is trading nearly 8% lower from the start of the year, which lags the nearly 1.5% upside seen in the S&P 500. One of the main drags on Apple has been its loss of market share in China, which is seen as one of the biggest markets for mobile devices.
Apple earnings—what do investors expect?
Analysts expect Apple to report earnings per share (EPS) of $2.35 for its fiscal first quarter, according to TradingView. Revenue is expected to cross the wires at $124.25 billion. That would compare to an EPS of $2.18 on $119.6 billion in revenue a year ago.
Last quarter, Apple reported EPS of $0.97 on $95 billion in revenue. The first quarter is typically a strong one for Apple because it captures holiday-season spending when consumers usually splurge on iPhones and other Apple electronics.
Apple has missed EPS expectations only one time in the preceding four quarters, and it has managed to surpass revenue expectations in the last four quarters.
Analysts are mostly upbeat on Apple, with 21 strong buy ratings, 11 buy ratings, and 15 hold ratings. Only five analysts hold a sell or strong sell rating on the stock. The average one-year price target among those who cover the stock stands at 246.68 per share, representing a 6.6% gain from Monday’s 231.50 trading price.
Given the importance of Apple’s holiday quarter, it could be a make-or-break report for the performance of Apple stock over the coming weeks and months. If the iPhone maker exceeds expectations on EPS and revenue, it could create positive momentum for the stock, given its strength compared to other technology stocks despite the DeepSeek news.
Trading Apple earnings
Apple’s technical structure took a hit this year after prices surrendered below the 100-day simple moving average (SMA)—a technical level that has supported prices since last May. Although prices are still holding above the 200-day SMA, traders should push Apple back above the 100-day SMA before targeting the levels reached in December, when Apple hit an all-time high.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
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