Apple's earnings beat: Can the stock keep rising?

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nerdbull1669 joined discussion · Sep 23 08:14

Trade Option As Wedbush PT $310 Possible As Apple (AAPL) Could Cross 8 Month High

Better-than-expected early sales ofApple's (AAPL) iPhone 17 smartphones are likely the result of consumers retiring their aging handsets, not because of any exciting new features, analysts say. Apple stock rose Monday after the first weekend of iPhone 17 sales.

We are seeing $Apple (AAPL.US)$ at 8-month high. Wedbush have give a price target of $310, we need to understand that Wedbush analyst Daniel Ives, a notable bull, has a price target of $310, arguing that the iPhone 17 is a "game changer" and that a major AI-driven upgrade cycle is still being underestimated by the market. However, it's important to note that Wedbush's target is among the highest on Wall Street.

Trade Option As Wedbush PT $310 Possible As Apple (AAPL) Could Cross 8 Month High

In this article, I will be sharing why it is plausible Apple could be above $300 by Dec 31, 2025, but it is not the base case. Rather we will assign roughly ~30–35% probability today, with the outcome hinging on a handful of clear catalysts (and conversely a few clear risks).

Why It Is plausible

The market is re-pricing Apple after strong early iPhone 17 demand and analyst upgrades (Wedbush raised a target to $310 after iPhone 17 tracking “~10–15%” ahead of iPhone 16). That kind of upgrade momentum can trigger multiple expansion.

Apple just launched the iPhone 17 / Pro line and is pushing higher entry storage and fresh SKUs — good for unit demand and potentially higher ASPs if Pro mixes hold.

Apple’s recent results show the company still prints large iPhone revenue and strong services growth, giving it earnings leverage if hardware keeps surprising to the upside. (FY 2025 Q3: revenue $94B; strong iPhone revenue vs. model.)

What needs to happen for > $300 by Dec 31, 2025

iPhone 17 sales sustain > single-digit upside vs iPhone 16 (early reports suggest +10–15% tracking) → drives iPhone revenue beats.

Guidance uplift for the Sep/Dec quarter (Apple explicitly raising FY/near-term guidance). Positive guidance often short-circuits a re-rating.

Services/Install Base monetization holds/accelerates (subscription + add-ons), improving forward EPS even if hardware growth normalizes.

Multiple expansion: the market needs to pay a higher P/E (or a higher forward multiple) — often triggered by macro tailwinds (rates falling), better growth visibility, or big positive surprises on margins/AI positioning. Current market action shows investors are willing to re-rate on the iPhone beat.

Key risks that push the probability down

ASPs weaken (premium models underperform vs. cheaper models), compressing revenue per unit and EPS.

Macro slowdown / weaker consumer spending (EM weakness or revised holiday season demand).

No guidance lift — if Apple beats but keeps conservative guidance, multiples may not expand.

Any supply or regulatory hiccups that limit sell-through or margin.

Simple scenario map (price ranges by Dec 31, 2025)

Bull (30% chance): iPhone 17 continues +10–15% share/units vs prior cycle + services upside + guidance bumped → multiple expands → >$300 (target zone $300–$340).

Base (50% chance): iPhone sells solidly but ASP/mix or guidance conservative → steady EPS growth, little multiple change → $240–$300 (AAPL drifts but stays below $300).

Bear (20% chance): ASP/mix disappointment, macro slowdown, or guidance cuts → <$240.

Concrete watchlist (signals we can use to update the probability)

Weekly/daily sell-through and carrier/backorder reports for iPhone 17 (sell-out vs. launch).

Apple guidance at next update — any lift is highly bullish.

Services growth / ARPU metrics — acceleration supports valuation.

Macro indicators (consumer confidence, holiday retail trends) — affect upgrade cadence.

Options implied vols and flows (if calls gather large interest at $300+ strikes, market participants are betting on a re-rate).

Practical takeaways / trade ideas

If we are bullish on the >$300 outcome: consider call spreads that limit premium but capture upside (e.g., buy 1–2 month wide calls through Dec expiries or a calendar/bull-call spread into December).

If we want income but still bullish: sell covered calls near $300 on existing shares (collect premium, yield if stock stalls).

To hedge a long view: buy protective puts or put spreads under key technical support levels.

Current market context

Apple is trading in the mid-$250s after the iPhone 17 launch and recent upside; that’s roughly ~17% below $300 (so $300 requires mid-teens percentage gain plus some multiple expansion). Recent headlines and analyst target bumps (Wedbush to $310) show the market is starting to price this scenario — but it remains conditional on sustained data.

Bottom line: > $300 by end-2025 is entirely achievable, but not a foregone conclusion. We would give it roughly 30–35% probability today.

In the next section, I would like to share some example option-strategies (structures) for Apple stock (AAPL, current price ≈ $256) and P&L under three scenarios by end-of-2025: Bear, Base, Bull.

Do note that these are illustrative only; real option prices (premiums, implied vols) will matter in execution.

Assumptions

Current AAPL ≈ US$256

Expiry chosen: Dec 20, 2025 (close to end-of-year)

Volatility and time value estimates are simplified; premiums are estimated.

Scenarios for AAPL price at expiry:

Transaction costs, bid-ask spreads, early assignment risk ignored.

Strategy 1: Long Call (Straight Call)

Buy 1 call with strike $300, expiry Dec 2025.

Premium paid: say $15 (just illustrative; real premium may differ)

Net cost: –$15

Payoff / P&L at expiry:

Breakeven point = Strike + Premium = $315

To make profit, AAPL must be > $315 by expiry

Strategy 2: Bull Call Spread

Buy $280 call, sell $330 call — both Dec 2025.

Premium paid for $280 call: ~$25

Premium received for $330 call: ~$10

Net cost (debit): ~$15

Payoff / P&L:

Max loss = $15 (if price ≤ $280)

Max gain = $ (330−280) − cost = $35

Breakeven = Strike_long + net cost = $280 + 15 = $295

Strategy 3: Long Call Spread with Lower Strike + Tail Upside (Call Ladder)

Buy $270 call, sell $310 call, sell a further out-of-the-money call (say $350). This is more complex; gives some upside but caps very high. For simplicity, here is a simpler version: buy $270 call, sell $300 call (bull call spread), plus buy a further $330 call for speculative tail.

Actually, let me outline aCall Butterfly:

Buy $280 call, sell 2 × $320 calls, buy $360 call. (All Dec 2025). This strategy profits if price is near the wings, with limited losses otherwise.

But perhaps simpler is:

Strategy 3: Long Call Butterfly (280/320/360)

Buy 1 × $280 call

Sell 2 × $320 calls

Buy 1 × $360 call

Let’s assume:

Premium for $280 call: ~$25

Premiums received for 2 × $320 calls: 2 × ~$12 = ~$24

Premium paid for $360 call: ~$6

Net premium paid= 25 − 24 + 6 = $7

Payoff / P&L:

Max gain occurs when AAPL near the short strike (here $320).

Breakevens: Lower BE ≈ strike of long lower call + net cost = ~ $280 + $7 = $287. Upper BE ≈ strike of long upper call − net cost = $360 − $7 = $353 (but in practice profit declines above $320).

Summary Comparison

What These Tell Us

If we believe Bull ($330) is likely, long calls or wide call spreads give good leverage.

If our view is Base (~$285) we would want structures with lower breakevens (e.g. spreads or butterflies) so we do not lose everything.

If we are cautious or expect Bear ($220), all these lose — but spreads & butterflies limit downside vs. naked long calls.

Final Notes and Summary

Whether Apple's stock can reach $300 by the end of 2025 is a topic of significant debate among analysts. The stock's recent surge, reaching an 8-month high, is largely attributed to strong early demand for the iPhone 17, which some reports suggest is tracking ahead of its predecessor. This signals a robust upgrade cycle.

Wedbush analyst Daniel Ives, a notable bull, has a price target of $310, arguing that the iPhone 17 is a "game changer" and that a major AI-driven upgrade cycle is still being underestimated by the market. However, it's important to note that Wedbush's target is among the highest on Wall Street.

We need to understand that we should not be agreeing with any single analyst's price target. The consensus price target from a broader range of analysts is currently closer to $250. This reflects a more cautious outlook, factoring in potential headwinds like global economic slowdowns, geopolitical risks, and intense competition.

While the iPhone 17's performance is a strong tailwind, a sustained rally to $300 would likely depend on flawless execution of their AI strategy, continued double-digit growth in services, and a favorable macroeconomic environment.

Appreciate if you could share your thoughts in the comment section whether you think Apple would be able to ride on the current iPhone 17 strong tailwind and make a rally towards $300 and even hit the price target by Wedbush of $310.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.

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