The excitement is growing
Apple will announce its fiscal Q3 2025 financial results this Thursday after market close and this is something that Wall Street is gearing up to witness fireworks. The excitement of the analysts is nearly infectious i.e., the consensus is to expect $89.1billion-$89.5billion revenue growth, or a little less than 4% year by year, estimated EPS is $1.42 to $1.45. With respect to Apple, Goldman Sachs is sure that Apple will exceed the expectations due to the Services growth and stable iPhone sales.
This spring, the company expects to reach an upward price target of $235, believing that Bank of America is significantly bullish. In spite of the fact that the stock price of the company has not been able to stay above $205 in the last few weeks. At the same time, the average price target by the Visible Alpha analysts settles at $233, or about 9% higher.
Investors are hoping that AI will change the Narrative
In the bullish projections, the company is betting on Apple Intelligence, a broad load of AI elements, at WWDC 2025. That suite contains real-time translation in Messages, FaceTime, and Phone, augmented visual intelligence capabilities, combining on-device detection with ChatGPT-based creativity, and significant improvements to user experience, which will deliver more context of assistance that is also personalized.
Apple will come to not only meet the competition but to surpass it exponentially given the features that will be rolled out widely this fall. And its AI layer will include open access to third-party developers, so that apps can tap into the giant language models that Apple created to produce offline, privacy-focused intelligence. New features such as Genmoji, Image Playground, and up to eight new languages supported through live translation are set to provide users with new tools to communicate and get things done, in a manner that is end-to-end integrated across iPhone, iPad, Mac, and beyond.
It will launch at the time when there is excitement about the upcoming next-generation iPhone release in September to match an innovation thrust with a time-worn upgrade cycle. The feeling among analysts is that several of the changes that Apple is making with regard to AI are bound to stimulate customer upgrade levels as well as investor eagerness at an opportune moment in the life of the tech giant.
The Shadow of the 490 Million Dollar Award
Nevertheless, despite all the hype regarding a potential new dawn and mind-blowing innovations by Apple, the company continues to reel under the blow of lawsuits that accused the company of deceiving investors regarding demand in China during the U.S-China trade war.
In November 2018, a more optimistic-than-real scenario given by the CEO Tim Cook led us to believe that the overseas-sales trouble was being experienced only at a few locales such as Turkey and Russia, but not in China. Only two months after, on top of already established fading demand for iPhones in China, Apple sent jolts to markets by halving its sales prediction by 9billion dollars directly attributing it to sluggish demand in China. The impact was instant as shares of Apple declined 10% on Jan. 3, 2019, taking away over $72 billion in shareowner value in a single day.
The shareholders immediately filed a case claiming that Apple did not disclose the seriousness of the China situation, as well as, deceived them on the facts regarding production cuts and consequential risks. With years of courtroom back and forth, Apple settled on the $490 million payout in March 2024, though still maintaining its innocence.
Investors who bought Apple shares late in 2018 can still submit claims and recoup at least some of their losses, though a proportion of the settlement is devoted to the legal costs and even absolute recovery stands at well below 1% of the last reported full year profits at Apple. Further information about the settlement site contains further information (where to file a claim or know more about the settlement in detail).
Chinese Demand is a complex puzzle
The China iPhone incident was not a minor blow, and the role of China in the Apple supply chain is crucial, choppy and risky. The most recent quarter is expected to see iPhone revenue increase by 2% to $40.23 billion with Services up strongly by 11%. This shows at least that Apple has got its global growth formula right at present. Nevertheless, there remains trade tension with U.S. policymakers issuing warnings about new tariffs on the devices that were not manufactured in the United States and walls-eyed investors with their institutional investor clients on the cautionary steps of the volatile economic and political environment in the United States.
The State of the Stock
Analysts are quick to remind that following the reputational damaging blows and increased regulatory oversight, Apple stock has increased 4X since 2019 disclosure of the China management, increasing shareholder value by over $2 trillion. All the above, the fortress balance sheet of the company, cash flow greatness and overall performance consistency gives enough ground to be positive even in case of a checkered quarter or two.
Future of Apple
Apple, that has a legacy in the making of iconic, self-contained products, the compatibility of their software, and continuously expanding set of services that keep the flywheel running. AI would potentially open up new levels of stickiness within its product set, which would boost everything, including productivity, user experience, and upgrade cycles.
There are still risks i.e., suspicion of regulators, a new threat of warfare over trade and the history of weaknesses of transparency all make Apple tread lightly. However, given a new era in AI-driven technology, Apple is hoping that the most ambitious innovation will once again reassure its status and remain centered around the digital universe.
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