Apple Earnings Preview: China Concerns and AI Hopes Amid Market Scrutiny
Analysts Weigh in on Apple's Upcoming Earnings Report
Apple is poised to release its fiscal first-quarter earnings results on Thursday, drawing keen interest from Wall Street. Despite concerns over slowing iPhone sales in China and a lackluster launch of its AI features, analysts remain largely optimistic about the tech giant's prospects.
Headwinds: Challenges from China and the Strong Dollar
Analysts at JPMorgan cite declining iPhone market share in China and a strong US dollar as major headwinds for Apple. They note that consumer appetite for higher-priced iPhones remains limited outside of new product launches, constraining the company's ability to offset the impact of currency fluctuations.
Bright Spots: Services Growth and AI Potential
Despite these challenges, JPMorgan and Goldman Sachs highlight the strength of Apple's services business as a potential mitigating factor. Goldman Sachs anticipates 15% growth in App Store spending during the quarter, while JPMorgan sees Apple as "one of the most favored Edge AI ecosystems."
Goldman Sachs is also bullish on Apple's upcoming iPhones, expecting growth driven by new AI features and market expansion. Additionally, analysts at Wedbush believe the company's AI rollout is undervalued by investors and could fuel significant future growth.
Cautious Outlook from Barclays
While Barclays acknowledges solid sales of Apple's services and Mac products, it expresses concern over the potential delay in the upcoming iPhone SE4's launch. The firm believes this could impact the company's guidance for the second fiscal quarter.
Resilience Amid Weak China Sales
Bloomberg Intelligence predicts that Apple's earnings report will reflect the ongoing trend of weak iPhone sales in China offset by robust growth in the services business. Senior industry analyst Anurag Rana suggests that weak consumer spending and competition from Huawei could continue to hinder Apple's performance in the Chinese market. However, strong iPhone sales in the Americas and Europe are expected to soften the impact.