Strong sales and profits from that could quickly bring down its earnings multiple. Buying before that happens could ensure investors profit from a good return from the stock. Apple’s growth and brand strength make it appealing for long-term investors.
For long-term investors focused on stability and innovation potential, Apple offers value. But caution is advised until clearer signs of growth emerge. Overall, the average 12-month price target for Apple stock is between $230 and $236, representing about 10% upside from the current level. First, I’ll consider the positive, negative, and everything in between. As mentioned, Apple has built a very solid market position, selling products that consumers love.
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If you seek stability, consistent revenue, and strong financials, Apple might be right for you. Apple’s next quarterly earnings report (Q3 FY25) is scheduled for July 31, 2025. Analysts expect the company to post earnings of $1.42 per share, a modest 1.4% increase from the same quarter last year. Revenue is projected to rise to $89.1 billion, up 3.9% year-on-year. It’s impossible to say exactly when Apple will rebound, but I’m all for buying or holding Apple shares in 2025.
A decline in revenue can be concerning, as it might indicate reduced sales or challenges in the market. It’s should i buy apple stock important to investigate further to understand the underlying causes. Turning to valuation, the stock trades at a forward price-to-earnings (P/E) ratio of around 32 based on analysts’ estimates for fiscal 2026 (which will end in September). Apple is trading at a historically high P/E multiple, which implies that investors are already pricing in a lot of the growth. You wouldn’t normally expect to be paying 34 times earnings for a company that is growing at a rate of just 5% — but that’s what investors are getting with Apple today. The premium suggests that investors are expecting much more growth in the near term.
NASDAQ: AAPL
However, Apple shares reached a rough patch earlier this year when President Donald Trump originally announced his plan to impose tariffs on imports. This is a major concern for Apple since it produces most of its iPhones in China, a country the U.S. has placed great focus on as it constructed a tariff plan. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Here’s What We Learned From Big Tech Earnings Last Week
It’s important to keep in mind that, though Trump has singled out Apple, the company isn’t facing this problem alone. Most U.S. tech giants rely heavily on manufacturing abroad and, like Apple, could see costs rise if they bring that production to the U.S. In the first quarter of 2025, iPhone models took the top four spots in Counterpoint Research’s list of the best-selling smartphones globally. In addition, iPhone models also took top spots last year and the previous year.
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Adria Cimino has no position in any of the stocks mentioned. The unit includes iCloud storage, Apple Pay, and AppleCare protection plans. Services generate 25% to 30% of Apple’s total revenue while delivering up to 50% of profits. Apple’s Services division is projected to reach $108.6 billion in annual revenue for 2025. This represents the first time the segment will surpass $100 billion yearly.
UBS analyst David Vogt holds a neutral stance with a $220 price target. He points to weakening iPhone demand in China where local competitors Huawei and Xiaomi gain market share. Sat out capex on data centres and infrastructure that’s depleting other companies’ cash balances. The big capex spend may not have been the most efficient use of capital. Consistently buys back shares, which enhances return to shareholders.
- My concern is that with such a high valuation, expectations are going to be a bit high for the company’s upcoming results, and the risk of a correction looks high.
- Apple implemented price cuts to boost iPhone 16 sales in China.
- But, like any stock, investing in Apple comes with both benefits and risks.
- Also, they delivered a strong quarter (shares ran up before, not after the report).
Total product segment sales increased by 5% to $73.7 billion. Product gross margin rose by 170 basis points, helped by mix, although the company got hit with $1.1 billion of tariff-related costs. It is expecting a $1.4 billion tariff hit next quarter. For investors who are willing to buy for the long term, it’s not hard to see why these opportunities in AI could be a big win for the company. Apple has proven over the years it doesn’t need some groundbreaking new feature to entice consumers to buy new phones. And the promise of new AI features can provide it with enough of a carrot to get consumers to buy the iPhone 16.
Laura Martin, Needham senior internet and media analyst, joins CNBC’s ‘Money Movers’ to discuss her reaction to tech earnings. The CEO was facing risks from Trump’s tariffs, Google litigation and the AI craze. He turned to his playbook and now the iPhone maker is worth $4 trillion. Earnings season kicked into high gear last week when five of the Magnificent Seven members with a combined market value of over $15 trillion reported results.
In China, which has been a weak spot for the company, revenue fell by 4%. The tech world is competitive, with Apple facing rivals like Samsung, Microsoft, and Google. Samsung competes in smartphones, while Microsoft leads in personal computers and cloud services. IPhone 17 Launch – Expected September 2025It will be the main product event of the year. These strengths make Apple a reliable long-term investment, even if short-term performance is uncertain. Despite the drop, some analysts believe a strong upgrade cycle is coming.
- The COVID-19 pandemic showed Apple’s vulnerability to supply chain issues, mainly in China.
- The company expects a $1.1 billion tariff-related hit this quarter.
- He maintains a buy rating citing high-single-digit revenue growth expectations for Q4 and Q1.
- This represents the first time the segment will surpass $100 billion yearly.
- Its flagship iPhone can be seen in the hands of many around the world.
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Investing in stocks always involves risks, and past results don’t guarantee future success. For more on stock investing, see our guide on Pros and Cons of Stock Investments. Yet, if you worry about valuation, iPhone dependency, or competition and supply chain risks, think twice before investing.
Its ecosystem, including iOS, macOS, and iCloud, offers a highly integrated user experience. This encourages customers to buy more Apple products and services, leading to higher customer retention. Apple also invests in new products like augmented reality devices, which could open up new growth areas. Analytics Insight is an award-winning tech news publication that delivers in-depth insights into the major technology trends that impact the markets. The content produced on this website is for educational purposes only and does not constitute investment advice or recommendation.
With import tariffs potentially ahead, earnings may suffer. As a result, some investors have fled Apple shares, leading the stock to an 18% decline in the first half of this year — and a lower valuation. Apple is a great stock to own but I wouldn’t buy it today. My concern is that with such a high valuation, expectations are going to be a bit high for the company’s upcoming results, and the risk of a correction looks high. If you invest in it for several years, it can still be a great investment. But at the same time, there are many more attractively priced growth stocks that can make for better buys than Apple right now.