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Apple reported earnings on August 1, beat analysts’ expectations. Techopedia breaks down the company’s financials and the impact of this on Apple’s stock price in the future.
Apple Earnings and Its Impact on Stock
Apple posted a quarterly revenue of $85.78 billion, 5% higher than the previous year, while quarterly earnings per share clocked in at $1.40, an 11% gain on a year-over-year basis. Both revenue and earnings per share beat expectations, which stood at $84.53 billion and $1.35, respectively. The company’s CFO, Luca Maestri, said that against the positive earnings, they delivered $32 billion to shareholders with a $29 billion operating cash flow. Against the estimated earnings of $38.81 billion, iPhone revenue was $39.30 billion, and the iPhone business accounts for 46% of total sales. However, iPhone sales were down compared to last year. They were particularly down in China, where revenue dropped by around 6.3%.
Sales from other divisions provided support. The Mac division saw revenue of $7.01 billion versus the estimated earnings of $7.02 billion, and the iPad revenue came in at $7.16 billion versus $6.61 billion—a 24% growth YoY basis. The services revenue was $24.21 billion. Wearables, home, and accessories revenue stood at $8.10, while analysts estimated $7.79 billion. Apple is bullish on the current quarter. The CFO expects the Services sector to grow by 14%, the same as it did in the previous three. The company shared that it now has 1 billion paid subscribers.
Apple’s Plans: What We Know So Far
The company is continuously working to find its next big hit. It tried launching a car but failed to ship a product after years of development. The project was formally canceled in February 2024. Apple’s Vision Pro is its current foray into the mixed-reality category, or spatial computing, as the company refers to it. Apple also intends to cover the smart home segment, where the tech giant sees potential opportunities. There are plans to develop an AI-empowered personal robotic device, a long-term advancement.
In 2024, the most significant update for Apple tablets will be the release of the iPad Pro, iPad Air, Magnetic Keyboard, and an Apple Pencil. Also, Apple will move the tablet screens over to OLED, as used in the iPhone. Led by Microsoft in market valuation, Apple is second in the lead with a market cap of $2 trillion. Shifting towards generative Al, the company has acquired Canadian AI startup DarwinAI and is investing in generative AI, which has potential opportunities to offer.
Apple Stock Price and Prediction
Apple’s innovation, services segment growth, and relatively sustained share prices have made it a profitable long-term investment. AAPL, which started in 1980 with an offering price of $22, is one of the oldest in the tech market and has been the most rewarding for long-term investors.
AAPL has increased by 320% in the past five years and reached an all-time intraday high of $220 on June 12, 2024. Apple’s stock buyback of $110 billion is set to support its share price. Apple is expected to earn higher revenues with an average estimate of $386.8 billion, which is lower than 2022’s revenue of $394.3 billion but higher than last year’s revenue of $383.3 billion.
Tipranks, based on more than 30 Wall Street analysts’ estimates, puts Apple share as a Moderate Buy with a potential upside of $300 per share.
The stock can reach $237 by 2025. By 2030, with a total valuation of over $8.7 trillion, the share price may touch $561 – a more than 200% gain compared to today’s price.
The company’s profitability is expected to increase, with an estimated $6.59 earnings per share in 2024 and $7.28 in 2025, higher than the last two years. The bullish trends depend mainly on the growth and sustainability of the services segment. The growth in AppleCare, cloud services, and payment is set to maintain revenues in the coming quarters.
