[Financial Results Preview] Are Apple's possibilities in AI being downplayed?

Since sales of iPhones, which are Apple's main products, did not maintain the momentum of the previous year in the January-March fiscal year, and there is a high possibility that a decline in sales will be inevitable, it seems that attention will be drawn to the outlook for the April-6 fiscal year.

It is said that if Apple does not show a positive direction regarding the outlook for the April-6 fiscal year, there is a high possibility that stock price declines will be spurred. While the smartphone market is on a recovery trend, competition with rivals is intensifying, and the situation where Apple's strength is being questioned continues.

2024Q2 earnings forecast, sales down 4.45% from the same period last year to 90,614 billion dollars, and EPS to 1.49 dollars, down 1.72% from the same period last year
According to the AAPL 2024Q2 earnings forecast, sales are 90,614 billion dollars, down 4.45% from the same period last year, and EPS is 1.49 dollars, down 1.72% from the same period last year.

56.25% of analysts have bullish ratings and an average target share price of $200.37
According to Moomoo, the average target stock price presented by analysts is $200.37. Of the 32 analysts, 56.25% are bullish and 37.5% recommend neutrality. 6.25% of analysts recommend being bearish.

Even in the preliminary figures for global smartphone shipments for the January-March fiscal year announced by the private research company IDC on the 15th, Apple's market share has dropped to 17.3%, and the top position has been taken back by Samsung Electronics, which acquired a 20.8% market share.

Apple is also putting effort into expanding service businesses such as music distribution, etc., but the presence of iPhones, which earn more than half of total revenue, is still large. According to IDC, while the smartphone market is “coming out of the turmoil of the past 2 years,” it is good to see changes in the market environment, such as the demodulation of the Chinese manufacturer Xiaomi and the breakthrough of Transition, which has a base in Shenzhen, China and is strong in emerging markets such as Africa, etc., and it seems that the importance of whether or not Apple can win the competition with rivals will increase in terms of future prospects.

The impact of the company's delay in entering the AI field has been overestimated by the market, and the current is an opportunity to buy in reverse
The impact of the company's delay in entering the AI field is overestimated by the market, and there is also an analysis where the current situation may be an opportunity to buy in reverse.

Seeking Alpha analyst Christopher Robb believes that even though Apple's stock price in 2024 was downgraded and sluggish due to concerns about antitrust laws and slowing growth, it is still an attractive long-term investment option due to its strong balance sheet, unique corporate culture, and investment in artificial intelligence.

Also, he pointed out that Apple's valuation is still cheap compared to other companies in the same industry. The service business has mitigated the slump in hardware sales, and he believes that based on Apple's excellent track record, concerns about Apple's growth have been exaggerated too much.