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- Apple is about to report earnings, and investors are eager for a win with the stock down 16% this year.
- The iPhone maker has lagged in the AI race, and analysts want to know what it’ll do to catch up.
- Analysts want answers on the company’s AI progress and any impact from tariffs.
Apple is headed toward a pivotal earnings report
The company is set to report results for its fiscal third quarter after the close on Thursday. Apple stock is down 16% year-to-date, with tariff headwinds, iPhone demand, and a lack of a clear AI strategy compared to mega-cap peers weighing on the company.
The tech giant is expected to report revenue of $89.3 billion for the quarter, and earnings per share of $1.43.
Wall Street analysts say that progress on AI, such as any update on a rumored deal with Perplexity, would go a long way in soothing investors’ fears that the iPhone maker is losing ground in the AI race. Tariffs are also still in focus, with analysts watching for updates on how the trade war has impacted the company.
Apple will report results shortly after 4 p.m. ET on Thursday, with a call scheduled for 5 p.m. ET.
How is the trade war affecting profits?
In a note earlier this week, Bank of America said its clients would be most interested in Apple’s Q2 and future estimated profit margins for clues about how the company, with its sprawling global supply chains, will be able to navigate the trade war.
BofA analyst Wamsi Mohan says tariffs should have a “meaningful negative impact” on Apple’s profits.
One thing that could counteract a hit to margins, however, is the release of a slimmer iPhone, Mohan said. The company could announce the product, which they would likely sell for a higher price than previous iPhones, in September.
“We expect the slim iPhone to replace the Plus model from last year and be priced $100 higher vs the Plus model,” Mohan wrote.
BofA has a “Buy” rating on Apple stock, and expects it to climb to $235 a share within the next 12 months.
Apple earnings estimates: Wall Street expects $89.3 billion of revenue, $1.43 of EPS
Third quarter
Revenue estimate $89.3 billion
- EPS estimate $1.43
- Products revenue estimate $62.81 billion
- IPhone revenue estimate $40.06 billion
- Mac revenue estimate $7.3 billion
- IPad revenue estimate $7.07 billion
- Wearables, home and accessories estimate $7.78 billion
- Services revenue estimate $26.9 billion
- Greater China rev. estimate $15.19 billion
- Total operating expenses estimate $15.34 billion
- Gross margin estimate $41.16 billion
Fourth quarter
- Capital expenditure estimate $3 billion
Full year
- Capital expenditure estimate $11.28 billion
Source: Bloomberg data
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