Apple’s (NASDAQ: AAPL) share price has slipped since the company released its Q3 2024 earnings, with concerns about its revenue forecast seeming to impact the stock.
At the close of the market on October 31, AAPL was trading at $225.91, ending the day with losses of almost 2%. The decline continued in pre-market trading, dropping by about 1.6%.
Why Apple stock is down
Although the tech giant reported strong performance for the quarter ending September 2024, investors appear concerned about the company’s future revenue forecast.
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Apple’s Chief Financial Officer, Luca Maestri, informed analysts that the company expects overall revenue to “grow low to mid-single digits” during its fiscal first quarter, ending in December.
Accordingly, analysts had projected revenue growth of about 6.65%, reaching $127.53 billion. Apple expects double-digit growth in its services business in the first quarter but did not provide revenue guidance for the hardware segment.
The stock fell despite Apple reporting adjusted earnings per share of $1.64, slightly above the $1.60 estimate. Revenue for the quarter was $94.9 billion, up 6% from last year’s $89.5 billion. iPhone sales surpassed analysts’ expectations, reaching $46.22 billion versus the $45.16 billion estimate.
It’s worth noting that Apple’s push into artificial intelligence (AI) attracted attention during the quarter, especially with the rollout of the iPhone 16.
The company unveiled “Apple Intelligence,” which will be integrated into its devices. This venture into AI is expected to positively impact future earnings as the technology becomes more widely adopted.
“I continue to view AAPL stock as dead money until hard evidence of an AI-supercycle is found,” Ahan Vashi, Investing Group Leader for The Quantamental Investor, said.
Expert’s take on AAPL stock price
Following Apple’s earnings report, several analysts have offered insights on how the stock might trade. Oppenheimer reiterated its ‘outperform’ rating and set a $250 price target, citing strong EPS, revenue, and consumer electronics product and service sales as potential bullish drivers.
Wedbush’s Dan Ives observed that the company’s Q3 results reflect a positive reaction to Apple’s latest report, emphasizing strong product and service sales achieved even without Apple Intelligence being available in China.
Ives remains bullish on AAPL, setting a price target of $300.
Meanwhile, KeyBanc Capital Markets analyst Brandon Nispel noted that the company’s below-consensus guidance for December-quarter revenue suggests “expectations should reset lower, which could pressure the stock as forecasts seem too high for 2025 and 2026.”
In this regard, after the recent earnings, he maintained an ‘underweight’ rating and a $200 price target.
Finally, Apple’s Q3 2024 earnings report reflects strong current performance but has left investors uncertain about its revenue outlook for 2025 and beyond.
While analysts are divided, it suggests that AAPL’s stock may experience continued volatility as investors assess the long-term impact of Apple’s evolving strategy.
