Top Analysts Expect Apple to Report In-Line Q3 Revenue, Say ‘Sentiment Is Negative' on AAPL Stock

Business Insider

10 hours ago

iPhone maker Apple (AAPL) is scheduled to announce its results for the third quarter of Fiscal 2025 (June quarter) on July 31. Ahead of the results, Krish Sankar, a top analyst from TD Cowen, reiterated a Buy rating on Apple stock with a price target of $275. Sankar expects Apple to report its June quarter revenue in line with Wall Street's expectation of a 4% year-over-year growth. The analyst stated that the sentiment on AAPL stock remains 'relatively negative,' given its insufficient artificial intelligence (AI) offerings, sensitivity to tariffs, and an unfavorable regulatory backdrop.
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Sankar contends that Apple's 'incomplete' AI strategy remains the biggest overhang on its stock. He believes that the company still has about 1.5 years to provide a compelling solution. Sankar's sentiment is also echoed by another top analyst from Bank of America.
Top Analysts Weigh in on Apple's Q3 Expectations
Sankar said that his Q3 FY25 sell-in estimate for iPhone sales is 43 million units. He thinks that year-over-year declines in China were a moderate headwind in the second quarter of the calendar year, but the September quarter could see easier comparisons.
Further, he expects non-iPhone revenue to decline by a low single-digit percentage year-over-year in the June quarter. Meanwhile, Sankar expects Services revenue to increase by 11%. Despite a subdued macro environment, the 5-star analyst expects AAPL to report June quarter results in line with the Street's estimates. He expects the company to issue September revenue growth guidance of low single-digit percentage on approximately flat year-over-year iPhone units.
Another 5-star analyst, Wamsi Mohan from Bank of America, also believes that there is a 'tough setup' heading into Apple's fiscal third-quarter results due to tariff-led margin pressures and ongoing regulatory concerns. Mohan highlighted that client sentiment is 'fairly negative,' due to tariff uncertainty, the U.S. Department of Justice's (DOJ) investigation into Google's (GOOGL) payments (Traffic Acquisition Cost or TAC) to Apple, App Store headwinds, and slow progress in AI.
Mohan expects Apple to report in-line Q3 FY25 results, with the possibility for a slight revenue beat. He expects Q3 EPS and revenue estimates of $1.45 and $90.2 billion, respectively, compared to the Street's estimates of $1.43 and $89.3 billion. On the positive side, the analyst is upbeat about Apple's upcoming product cycles and expects iPhone, Mac, and iPad sales to gain from the launch of new models, including a slim iPhone priced at $100 above last year's Plus version and a new iPad Pro with an M5 chip expected this fall. Mohan reiterated a Buy rating on AAPL stock with a price target of $235.
Is AAPL Stock a Buy, Sell, or Hold?
Overall, Wall Street has a Moderate Buy consensus rating on Apple stock based on 13 Buys, 11 Holds, and one Sell recommendation. The average AAPL stock price target of $229.11 indicates 7.1% upside potential from current levels. AAPL stock is down about 15% year-to-date.