Analysts from Bernstein have praised Apple’s fiscal Q3 performance by highlighting that the results were modestly ahead of consensus. They noted that revenues grew by 5% and services expanded by 14%. Moreover, Bernstein emphasized Apple’s strong free cash flow and its restrained capital expenditures, describing Apple’s approach as “capital-light” to mitigate overinvestment risks.
Goldman Sachs analysts noted the solid performance of Apple, which was driven by iPhone and services. They highlighted that Apple’s channel inventory is at the low end of its target range, indicating strong demand. Moreover, they are optimistic about a multi-year replacement cycle for the iPhone and highlighted robust service margins. Goldman Sachs also pointed out that Apple’s gross margin guidance for Q4 could mark a September quarter record, reinforcing the potential for continued strong performance.
Piper Sandler on June Quarter Results
Piper Sandler observed that Apple’s June quarter results slightly exceeded expectations, driven by growth in iPad and services. Despite a year-over-year decline in iPhone revenue, the install base reached new highs. They remain cautious about the consumer market in the second half of the year but acknowledged management’s excitement about Apple Intelligence. Piper Sandler maintained a Neutral rating and a $225 price target, citing appropriate current valuation.
Wells Fargo on Apple’s Earnings Guidance
Wells Fargo deemed Apple’s earnings guidance as “good enough,” suggesting that it may be conservative. They remain positive on the potential for a strong iPhone 16 upgrade cycle, supported by long-depressed upgrade rates and growing consumer familiarity with generative AI. Wells Fargo also highlighted improving performance in China and reiterated their Overweight rating with a $275 price target.
Bank of America expressed that “the best is yet to come” for Apple, emphasizing the potential for a multi-year iPhone upgrade cycle driven by Apple Intelligence. They noted improving trends across Apple’s portfolio and regions, with services setting an all-time revenue record. Bank of America sees potential upside in iPhone units, higher ASPs, and gross margins, reiterating their Buy rating with a $256 price target.
Analysts agree that while there are some near-term challenges, Apple’s strong fundamentals and strategic positioning in AI and services set the stage for continued growth and potential stock appreciation. The general sentiment among analysts is positive, with many highlighting Apple’s strong performance and potential for a successful iPhone upgrade cycle driven by Apple Intelligence. The overall consensus is that Apple is well-positioned for future growth and continued success in the market.