Despite posting an impressive performance in 2024, Apple (NASDAQ: AAPL) has struggled in the first few weeks of 2025.
Apple stock has plummeted by 11.18% since January 1, down to a price of $222.42 per share at press time — driven primarily by weak iPhone sales in the critical Chinese market.
Historically, investors tend to overreact to iPhone sales numbers — which have a tendency to ‘revert to the mean’ or pick up momentum more slowly than initially anticipated. However, this time around, the drop in sales has Wall Street equity researchers worried.
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Apple’s artificial intelligence (AI) features are widely held to be a disappointment — and although the tech giant will doubtlessly improve its offerings on that front, the late rollout already means it is lagging behind the competition. On top of that, AAPL stock is trading at a high valuation — and analysts are beginning to doubt the company’s growth outlook.
On the whole, the Street still rates Apple shares a buy — but price targets are being reduced everywhere you look. In the midst of this bearish turn, however, one analyst has delivered a rather bullish overview of the situation.
Munster makes bold, bullish Apple stock prediction
Gene Munster, a renowned Deepwater Asset Management tech analyst, took to social media platform X in a January 21 post to comment on the downgrades that his colleagues have delivered in recent weeks.
My sense is the March quarter is going to be fine. Currently, analysts are expecting 3% y/y iPhone growth, a step up from 1.7% in the December quarter. Growth should step up because the 2021 iPhone upgrade cycle should pull in sales. It’s not about Apple Intelligence over the next few quarters. Next year, it’s all about Apple Intelligence.
Per Munster, the prevailing narrative boils down to this — Apple Intelligence cannot offset the company’s weakness in China. The analyst noted that disappointing sales numbers in December would most likely lead to Apple reducing guidance for the quarter ending in March. Understandably, that move would most likely put even more downward pressure on Apple stock.
With that being said, the Deepwater researcher does not see things playing out like that. With a 15% drop in Chinese sales, iPhone sales revenues from the rest of the world would need to have grown by 4% in December.
While that isn’t a particularly easy feat to accomplish, it would represent a deceleration from the growth Apple has been providing as of late. Per the company’s latest earnings report, in September, iPhone sales revenue outside of China grew by 7.5%. Essentially, Munster is pointing out that, barring a truly unexpected and unprecedented drop, overall revenue will most likely meet targets — and that guidance won’t be lowered.
Lastly, the analyst added that growth will likely step up due to the 2021 iPhone upgrade cycle pulling in additional sales. Munster noted that, while Apple Intelligence won’t be a key growth driver in the next few quarters, he expects it to ascend to that level next year. The company’s next earnings call is scheduled for January 30.
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