To The Moon

$Apple(AAPL)$ is scheduled to release its earnings for fiscal Q2 2025 after market closes on Thursday, 01 May 2025.

Revenue: Analysts generally expect revenue to be around $94.0 billion to $94.2 billion. This would represent a modest year-over-year increase of roughly 3.6% to 3.8% compared to $90.75 billion in the same quarter last year (Q2 2024). This aligns with Apple's previous guidance for low- to mid-single-digit growth for the quarter.

Earnings Per Share (EPS): The consensus EPS forecast is around $1.60 to $1.61. This indicates expected year-over-year growth of about 4.6% to 5.3% from $1.53 per share in Q2 2024.

Net Income: Expected around $24.2 billion, suggesting a 2.5% year-over-year increase.

Gross Margin: Forecasts suggest a slight improvement to around 47.1% compared to 46.6% in the prior year's quarter.

Apple (AAPL) Last Positive Earnings Call Saw Share Price Decline By 11.82%

Apple had a positive earnings call on 30 Jan 2025 which saw its share price declined by 11.82% since.

The earnings call reflected a strong overall performance with record-breaking revenue and growth in services and emerging markets. However, challenges in China and a decline in wearables revenue presented some areas of concern.

Apple (AAPL) Guidance

During the Apple Q1 Fiscal Year 2025 Earnings Conference Call, Apple reported a record revenue of $124.3 billion, a 4% increase from the previous year, with EPS reaching an all-time high of $2.40, up 10% year-over-year. The company set all-time revenue records in several regions, including the Americas, Europe, Japan, and the rest of Asia Pacific, and observed strong momentum in emerging markets such as Latin America and South Asia. Services revenue achieved an all-time high of $26.3 billion, growing 14% year-over-year. Apple also highlighted its installed base reaching over 2.35 billion active devices. Product-wise, iPhone revenue was $69.1 billion, Mac revenue rose by 16% to $9 billion, and iPad revenue increased by 15% to $8.1 billion. Despite a 2% year-over-year decline, wearables, home, and accessories revenue stood at $11.7 billion.

The company maintained a robust gross margin of 46.9% and reported operating expenses of $15.4 billion. Looking ahead, Apple anticipates low to mid-single-digit revenue growth in the March quarter, with services revenue expected to grow in low-double digits, despite facing foreign exchange headwinds.

Key Areas to Watch For Apple (AAPL) Q2 2025 Earnings

Apple reported revenue of $124.3 billion for the December quarter, up 4% from a year ago, marking an all-time record. EPS also set an all-time record of $2.40, 10% higher year-over-year.

Wearables, home, and accessories revenue was $11.7 billion, down 2% year-over-year, partly due to difficult comparisons with the prior year's launch of the Apple Watch Ultra 2.

iPhone Sales: As Apple's largest revenue source (accounting for 56% in Q1 FY25), iPhone performance is critical. Investors will look closely at sales trends amid potential cyclical slowdowns in the smartphone market and longer upgrade cycles. Some analysts anticipate modest year-over-year growth.

Mac revenue was $9 billion, up 16% year-over-year, while iPad revenue was $8.1 billion, up 15% year-over-year, driven by new product launches and strong customer interest.

Services Growth: This segment (App Store, iCloud, Apple Music, advertising, etc.) is increasingly important for offsetting moderating hardware growth. Analysts expect strong double-digit growth, potentially around 12% year-over-year. The sustainability of this growth is a key focus.

Services revenue reached an all-time record of $26.3 billion, up 14% year-over-year, with growth in every geographic segment and increased customer engagement.

Impact of Trade Tensions & China: With significant manufacturing reliance on China and the US being its largest market, Apple is exposed to US-China trade policy risks, including potential tariffs. Investors will listen carefully for management's commentary on navigating these tensions, potential impacts on cost structure, and strategies like supply chain diversification (e.g., shifting more production to India and Vietnam). Performance in the Chinese market itself will also be scrutinised.

Apple achieved all-time revenue records in emerging markets such as Latin America, the Middle East, and South Asia. India set a December quarter record with the iPhone as the top-selling model.

Greater China revenue decreased by 11% year-over-year, with over half of the decline driven by changes in channel inventory and competitive pressures.

AI Strategy Update: Following the introduction of "Apple Intelligence," investors will look for updates on its integration across the product ecosystem, the AI roadmap, and how Apple plans to compete in the AI space, especially given perceived delays compared to rivals.

Forward Guidance: Apple's outlook for the fiscal third quarter (ending June 2025) and potentially the rest of the fiscal year will significantly influence market reaction. Current Q3 consensus estimates are around $1.47 for EPS and $89.0 billion for revenue.

Capital Returns: Announcements regarding share buyback programs or dividend increases are always anticipated.

Apple (AAPL) Price Target

Based on 44 analysts from Tiger Brokers offering 12 month price targets for Apple in the last 3 months. The average price target is $236.21 with a high forecast of $300.00 and a low forecast of $141.00. The average price target represents a 12.87% change from the last price of $209.28.

Apple's stock has pulled back significantly in 2025 from its late 2024 highs, though it has seen some recent recovery.

Analyst ratings are generally positive, with a consensus "Moderate Buy" rating and average price targets suggesting potential upside from current levels. However, some analysts view the stock as fairly valued.

Technical Analysis - Exponential Moving Average (EMA)

Apple has earnings on the Thursday session, so earnings would be a biggest catalyst for Apple this week, and we can see that the bulls are moving nicely into uptrend continuation into resistance highs at 211 to 222. The bulls are in control, if Apple start moving lower anything above 189 then there would be a higher low for expansion.

But do note that Apple earnings would make it not any concern, but for the price action, I am expecting Apple to move 4-6% either direction, and I think the bulls are looking for a possibly going for higher highs as RSI suggest a trend change.

So if Apple can give an earnings positive enough to move Apple towards the 225, but we need to understand that there will be a lot of questions from investors on earnings about the China tariffs, China headlines repurposing their manufacturing and supply chains.

I would think the level near 210 is still manageable but Apple could be going down to 190 or 170 if earnings and guidance come in negative.

Summary

While analysts expect modest top-and bottom-line growth driven significantly by the Services segment, the focus will be on iPhone demand resilience, how Apple navigation of geopolitical trade risks, updates on its AI strategy, and crucially, its financial outlook for the coming quarters.

I would think we need to look at the management's commentary on 01 May to provide a clearer picture.

Appreciate if you could share your thoughts in the comment section whether you think Apple would be able to provide a positive guidance despite the challenges from China tariffs and if Apple AI strategy is working.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.