Jefferies Upgrades Apple Stock (AAPL) to Hold, But Stays Cautious as ‘AI Is Not Yet a Game Changer'
Don't Miss TipRanks' Half-Year Sale
Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Top Analyst Upgrades AAPL Stock to Hold on Strength in June Quarter
Lee cited Counterpoint data, which indicates that global iPhone sales volumes in April and May increased by 15% year-over-year, marking the strongest growth since the third quarter of 2021. The 5-star analyst believes that tariff-driven pull-in demand and share recovery in China could drive 8% and 10% growth in the June quarter (Q3 FY25) revenue and EPS, respectively, which would be nearly 5% and 9% greater than consensus estimates. Also, the June quarter top-line estimate is better than Apple's low-single-digit revenue growth guidance.
The analyst estimates that iPhone sales in China grew by 19% year-over-year during the 618 promotions, driving a nearly 10% growth in the first 2.5 months of the June quarter, thanks to targeted discounts and government subsidies. China's 618 festival is one of the biggest shopping events, during which major e-commerce retailers offer discounts. Lee believes that this is a strong indication that Apple is determined to protect its market share in China, and that Chinese consumers are still willing to buy an iPhone at lower prices. Given these positives, Lee sees a possible surprise for AAPL's Q3 FY25 results. Consequently, he raised his June quarter iPhone sales volume estimate by 9% to 49.4 million. The revised estimate indicates a 9% year-over-year growth.
Jefferies Remains Cautious on Apple Stock
However, Lee expects only flat iPhone unit growth in the second half of calendar year 2025 due to pulled-in demand in April and May and a lack of new features for the iPhone 17. In particular, he expects demand in the September quarter to 'suffer' due to the demand pulled forward in the June quarter. The analyst reduced his iPhone units estimate for the September quarter by 11% to 46.3 million, reflecting a 6% year-over-year decline.
Furthermore, Lee contends that the market's 'benign view on tariff is likely overly optimistic.' Lee sees the possibility of a roughly 7% hit to Fiscal 2025 and 2026 EPS (earnings per share), even if the U.S. imposes just a 10% tariff on India, a 20% tariff on Vietnam and a 30% tariff on China, which are rates less severe than the ones announced earlier in 2025. Lee also warned about the downside in Apple's Services revenue.
Overall, Lee remains sidelined on Apple stock, as some risks persist, but believes that 'good' Q3 FY25 results could help stabilize the stock over the near term.
Is Apple Stock a Buy, Sell, or Hold?
Prior to Jefferies' upgrade, Wall Street assigned a Moderate Buy consensus rating to Apple stock based on 16 Buys, nine Holds, and four Sell recommendations. The average AAPL stock price target of $226.54 indicates a 9% upside potential. Apple stock is down 17% year-to-date.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
38 minutes ago
- Business Insider
Another Blow for Tesla (TSLA) as Sales Crash in Germany
Electric-vehicle (EV) maker Tesla's (TSLA) June sales in Germany, Europe's largest automotive market, fell sharply. The company sold just 1,860 vehicles, reflecting a 60% drop year-over-year. This decline marks the sixth consecutive month of falling sales for the company. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Further, TSLA sold 8,890 cars in the first half of the year, reflecting a solid 58.2% fall compared to the same period in 2024. This poor performance saw Tesla's market share in Germany shrink to 0.6%. It must be noted that this sharp decline for Tesla contrasts with the overall growth in the German electric vehicle market. Last month, new battery electric vehicle registrations rose 8.6% in the country. Three Reasons Behind This Plunge The plunge in TSLA's sales is likely due to rising competition, especially from Chinese automaker BYD (BYDDF), whose sales tripled to 1,675 units in June. This points to changing consumer preferences towards newer, more affordable EV models. Further, production adjustments, including the retooling of factories for the refreshed Model Y, have impacted supply chains and vehicle availability during the month. In addition, a decline in CEO Elon Musk 's public popularity may be contributing to the company's struggles in Germany. Canaccord Analyst Remains Bullish on Tesla Stock Despite TSLA's weak deliveries report, Canaccord Genuity analyst George Gianarikas reiterated a Buy rating and a $303 price target on Tesla. The analyst expects TSLA to benefit from a revamped Model Y, possible new models, and the anticipated Robotaxi launch later in 2025. He sees Tesla as a bold bet on self-driving tech, energy storage, and robotics, but growth in EV sales remains key to its earnings outlook. Is TSLA Stock a Buy? Turning to Wall Street, TSLA stock has a Hold consensus rating based on 13 Buys, 12 Holds, and nine Sells assigned in the last three months. At $285.73, the average Tesla price target implies a 9.88% downside potential. The stock has declined 23.21% over the past six months.
Business Insider
38 minutes ago
- Business Insider
Morning News Wrap-Up: Thursday's Biggest Stock Market Stories!
The stock market will close early on Thursday and will be closed for the Fourth of July tomorrow. With that in mind, now is the perfect time for investors to catch up on today's hottest stock market stories! Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Empro Group (EMPG) stock underwent a massive rally after its initial public offering (IPO) yesterday. Rivian (RIVN) stock failed to impress with its Q2 deliveries. Amazon (AMZN) received bullish analyst coverage ahead of its Prime Day event. Global Interactive Technologies (GITS) stock soared following a company update. NetCapital (NCPL) stock plummeted after it launched a registered direct offering. Bank of America analysts reaffirmed a bullish rating for Apple (AAPL). The S&P 500 (SPX) jumped on U.S. job growth. Costco (COST) expanded store hours for Executive members but will be closed for the Fourth of July. Lucid Motors (LCID) missed Q2 delivery estimates but the stock still rallied. President Donald Trump revealed plans for a megabill signing event tomorrow. Apple saw its Chinese iPhone sales grow for the first time in two years. Sony (SONY) stock slipped after it announced plans to release a game on Microsoft's (MSFT) Xbox consoles. JPMorgan Chase (JPM) has announced David Frame as the new CEO of its global private banking unit. The latest jobs report plummeted the chances of a July interest rate cut. Several of Microsoft's Xbox studios canceled games and laid off staff. Super Micro Computer (SMCI) was up on increased demand for its artificial intelligence (AI) servers. Tesla's (TSLA) loyal retail investors have refused to sell the electric vehicle (EV) company's shares. The Nasdaq 100 ETF (QQQ) climbed alongside the .
The Hill
an hour ago
- The Hill
What Canada's tech tax scrap means for US trade talks
The Big Story Canada's decision to rescind its digital services tax (DST) to restart trade negotiations with the U.S. represents a boon for major tech firms and could be a harbinger of what's to come for similar measures in other countries, experts told The Hill. © AP Photo/Thomas Padilla The Canadian government announced late Sunday that it would scrap the tax on U.S. tech firms that was set to take effect Monday in a bid to bring the Trump administration back to the table and avoid heightened tariffs in the coming weeks. The move was successful for Ottawa, with the White House saying that trade talks would resume immediately. It was also cheered by the tech industry, which has lambasted digital services taxes as 'unfair' and 'discriminatory.' But experts say Canada's move could put pressure on other nations to follow suit and rescind their tech taxes. 'Going forward, I think the fact that Trump managed to bully or cajole Canada into dropping its [digital services tax] means that this will be a big item that he insists on in talks with Europe and any countries in all these trade negotiations,' said Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics. 'I see this as a harbinger of a more general repeal of digital services taxes,' he added, calling it a 'pretty big deal and a real victory for Trump.' Since taking office for a second time, Trump has repeatedly criticized taxes and fines on U.S. tech firms. He slammed the European Union (EU) in January, alleging that the bloc's hefty fines against American companies amount to a 'form of taxation.' The EU's top court ruled in September that Apple owed more than $14 billion in back taxes to Ireland, while upholding a $2.7 billion fine against Google by European antitrust regulators. Meta, the parent company of Facebook and Instagram, was also fined about $840 million for antitrust violations in November. The social media giant was hit with another $228 million fine in April, alongside Apple, which faced a $570 million penalty. Trump railed against the EU during a meeting with the NATO secretary-general in March, calling the European bloc 'nasty' over the tech fines, as well as a tariff on U.S.-made cars. 'They're suing Google, they're suing Facebook, they're suing all of these companies, and they're taking billions of dollars out of American companies,' he said at the time. The president has also taken aim at digital services taxes in particular, signing an executive order in February slamming the taxes as 'designed to plunder American companies' and declaring that the U.S. would respond to such measures with tariffs or other actions. Check out the full report at first thing Monday. Welcome to The Hill's Technology newsletter, I'm Julia Shapero — tracking the latest moves from Capitol Hill to Silicon Valley. Programming note: The Hill's Technology newsletter will be off tomorrow for the July 4 holiday. See you Monday! Did someone forward you this newsletter? Subscribe here. Essential Reads How policy will be impacting the tech sector now and in the future: YouTube in 'productive discussions' with Trump over Jan. 6 ban lawsuit YouTube is 'engaged in productive discussions' with President Trump's lawyers in his case against the social media platform for banning his account in the wake of the Jan. 6 Capitol riot, court documents show. In a court filing from late May, the two sides asked the judge to delay a June court hearing. The document was first reported Thursday by The Atlantic. 'The parties have engaged in productive discussions regarding … Managers are using AI to determine raises, promotions, layoffs (NewsNation) — Artificial intelligence (AI) isn't just changing workflows, it's deciding who moves up and who gets the boot. According to a new Resume Builder survey of 1,342 U.S. managers, 6 in 10 said they use AI tools to make decisions about their direct reports. Even more striking is that most managers who use AI said they've turned to it for high-stakes calls, such as determining raises, promotions and … Space Shuttle Discovery would move to Texas under GOP megabill The Space Shuttle Discovery would move to Texas under President Trump's sweeping tax and spending bill, according to Sen. John Cornyn (R-Texas). Cornyn's office said in a statement on his website that Trump's megabill 'would authorize' Discovery's shipment to 'an entity' close to Houston's Lyndon B. Johnson Space Center. It is currently on display at the Smithsonian's Steven F. Udvar-Hazy Center in Northern Virginia. 'Houston … The Refresh News we've flagged from the intersection of tech and other topics: Crypto Corner Lummis unveils crypto tax package © Greg Nash Welcome to Crypto Corner, a daily feature focused on digital currency and its outlook in Washington. Sen. Cynthia Lummis (R-Wyo.) unveiled new legislation Thursday updating tax rules for cryptocurrencies, as Congress continues to move toward establishing a comprehensive regulatory regime for digital assets. 'In order to maintain our competitive edge, we must change our tax code to embrace our digital economy, not burden digital asset users,' Lummis said in a statement. The crypto tax package would establish a de minimis rule for digital assets, exempting small transactions of less than $300 from taxes, in addition to exempting crypto lending from taxes and deferring taxes on income generated from crypto mining and staking until tokens are sold. It would also apply the typical 30-day wash rule to digital assets, removing a loophole that has allowed crypto investors to sell tokens at a loss and then quickly buy them up again while still claiming a tax deduction. Crypto dealers and traders would also be eligible for mark-to-market treatment under the rules. This means that crypto holdings, like securities holdings, could be considered as if they were sold at market price at the end of the year for tax purposes, allowing individuals to claim losses that can then be deducted from their taxes. Lummis underscored Thursday that the congressional Joint Committee on Taxation estimates the bill would generate about $600 million through 2034. 'This groundbreaking legislation is fully paid for, cuts through the bureaucratic red tape and establishes common-sense rules that reflect how digital technologies function in the real world,' she said. The Wyoming Republican indicated earlier this week that she hoped to get crypto tax provisions into President Trump's sweeping tax and spending bill. However, the legislation ultimately passed out of the Senate on Tuesday without the measures. What Others are Reading Two key stories on The Hill right now: House sends GOP's 'big, beautiful bill' to Trump's desk in major win for Republicans The 'big, beautiful bill' is heading to President Trump's desk. House Republicans passed the core of Trump's domestic policy agenda Thursday afternoon … Read more Supreme Court enables Trump to resume South Sudan deportation flight The Supreme Court in an apparent 7-2 decision Thursday cleared the way for the Trump administration to restart plans to deport a group of convicted … Read more You're all caught up. See you next week! Thank you for signing up! Subscribe to more newsletters here
