Apple Q1 Earnings Beat Forecasts, iPhone Sales Decline in China Attributed to Channel Inventory
Key Points:
* Apple's (AAPL) first-quarter earnings surpassed analyst expectations, with EPS of $2.40 and revenue of $124.3 billion.
* iPhone revenue in China declined 11% year-over-year, but CEO Tim Cook attributed this to channel inventory adjustments, not weak demand.
* Apple's AI features helped drive iPhone upgrades, and government approval for AI rollout in China could boost sales further.
* JPMorgan, Citi, and Raymond James maintain Buy ratings for Apple, citing positive analyst commentary and the company's strong AI positioning.
* Apple's prudent spending on AI infrastructure compared to its "Magnificent Seven" peers positions it well in the AI bubble.
Analyst Reactions:
* JPMorgan: Raised price target from $260 to $270, citing Cook's commentary and potential Chinese subsidies.
* Citi: Maintained Buy rating, noting stronger-than-feared results and the outperformance of regions with rolled-out iPhone AI features.
* Raymond James: Believes Apple's AI capabilities and focus on privacy make its stock attractive in the GenAI monetization debate.
* Morgan Stanley: Asserts that Apple's AI ambitions are more contained than other tech giants.
* Jefferies: Maintains Underperform rating, expressing skepticism about the attractiveness of AI services to smartphone users.