Here’s what Wall Street is saying about Apple earnings

Apple (AAPL) is scheduled to report results of the third fiscal quarter of FY25 after the market close on Thursday, July 31, with a conference call scheduled for 5:00 pm ET. What to watch for:

EXPECTATIONS: Last quarter, Apple beat consensus sales and earnings expectations, reporting EPS of $1.65 on Q2 revenue of $95.36B in what CEO Tim Cook called “strong quarterly results.”

Cook, who also highlighted double-digit growth in Services, said the company was “happy to welcome iPhone 16e to our lineup, and to introduce powerful new Macs and iPads that take advantage of the extraordinary capabilities of Apple silicon.”

Current consensus EPS and revenue forecasts for Apple’s June-end quarter stand at $1.43 and $89.16B, respectively, according to data from LSEG Data and Analytics. Consensus EPS and revenue forecasts for Apple’s September-end quarter stand at $1.66 and $97.85B, respectively, according to LSEG Data.

Among analysts tracked by Bloomberg that have updated their views on Apple within the last twelve months, 36 have Buy or equivalent ratings, 20 have Hold or equivalent ratings and three have Sell or equivalent ratings. The average twelve month price target of 43 of those analysts is $226.74.

DOWNGRADE, UPGRADE: On the day after the fiscal Q2 report, Rosenblatt downgraded Apple to Neutral from Buy with a price target of $217, down from $223. The earnings print showed a company “with amazing supply chain skill, and better demand for iPhones than many had feared,” the analyst told investors. However, for the stock to work, there needs to be an artificial intelligence driven “sharp acceleration” in iPhone sales, Rosenblatt argued. With the argument for “fading,” what is left is a “well-run company, with OK-muted growth,” it added.

At the same time, Jefferies downgraded Apple to Underperform from Hold. The March quarter was in line with expectations and management indicated limited pull in for fiscal Q2, but guided only low-single to mid-single digit revenue growth and estimated a $900M tariff impact in the next quarter, the analyst told investors. The product gross margin is already under pressure and the firm believes tariff impacts will expand over time to create more earnings downside, it added at that time.

However, on July 1, Jefferies analyst Edison Lee upgraded Apple to Hold from Underperform with a price target of $188.32, up from $170.62. Counterpoint reported global iPhone’s sales volume in April plus May was up 15% year-over-year, marking the strongest growth since Q3 of 2021, the analyst told investors. Tariff-driven pull-in demand and share recovery in China could drive June quarter revenue and EPS growth of about 8% and 10%, respectively, which would be roughly 5% and 9% respectively greater than consensus and greater than Apple’s low-single digit revenue growth guidance, the analyst added while previewing fiscal Q3 results. While the market’s benign view on tariff is “likely overly optimistic,” and Apple’s service revenue has downside potential, good Q3 results “could keep the stock stable” near-term, the analyst argued.

More recently, Morgan Stanley noted that the firm’s estimates for Apple were “moving higher” ahead of what it expects to be a “solid quarter” driven by strength in iPhone, iPad, Mac and favorable foreign exchange rates. Management’s September-end quarter guidance is likely to bracket the firm’s and consensus expectations, but more clarity is needed on tariffs, the upcoming Alphabet (GOOGL) remedy ruling, and AI strategy “before sentiment can materially shift,” added the analyst, who maintained an Overweight rating and unchanged $235 price target on Apple shares ahead of the company’s fiscal Q3 report.

APPLE PERPLEXED ABOUT AI: In June, Bloomberg’s Mark Gurman reported, citing people familiar with the matter, that Apple executives had internal conversations about potentially bidding for Perplexity AI in order to gain more AI talent and technology. According to the report, Adrian Perica, the company’s head of mergers and acquisitions, has considered the idea with services chief Eddy Cue and top AI decision-makers, though discussions of a bid with Perplexity management have not taken place.

Subsequent to that news, BofA noted the article suggesting that Apple is looking to buy, or partner with, Perplexity AI, adding that any such deal would likely be positive for shares that “in the penalty box” given Apple is largely viewed as an AI laggard. The firm, which added that it does not have any direct knowledge of the probability of such a deal, sees “many reasons a deal would make sense,” including access to a high quality AI company with state of the art AI search and answering capability, access to talent and AI expertise, product synergies driven by improving Siri and monetizing hardware and services, and preventing this asset from falling into a competitor’s hands and providing access to the search advertising market as an alternative to Google (GOOGL). BofA has a Buy rating on Apple shares.

In its own reaction note, UBS reiterated a Neutral rating and $210 price target on Apple after it was said the company was weighing either acquiring Perplexity AI or partnering with the company and adding it as a search engine option within Safari as well as integrating functionality into Siri. While a partnership or integration of Perplexity with Apple’s platform has been discussed for a year, an acquisition would be the largest transaction in Apple’s history and comes with some risk, the analyst told investors. While paying at least $14B is a “manageable risk,” Apple’s track record in integrating larger acquisitions has been mixed, the analyst added, while also noting that Perplexity has faced allegations of unauthorized content use and plagiarism. The firm added that, given Apple’s AI efforts have been a bit underwhelming, it believes a deal would likely be construed as defensive in nature, not a positive catalyst.

TRUMP THREAT: In late May, President Donald Trump posted on Truth Social: “I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else. If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.”

After Trump made the threatening post, Goldman Sachs said that reciprocal tariffs, excluding the current tariff suspensions, on Apple’s key final assembly countries were already above 25%, so Trump’s message was consistent with then-current trade policy. With that said, this may suggest a lower likelihood relative to investor expectations that smartphones as a category may be less likely to receive tariff exemptions, the analyst added.

After President Trump said he would impose at least 25% tariffs on Apple if iPhones sold in the U.S. are not manufactured domestically, Citi analyst Atif Malik said that assuming 25% tariffs on all U.S. product imports as a bear case would lead the firm to estimate about 130 basis points incremental gross margin impact, or 4% incremental EPS impact in FY26. However, its base case assumes 20% tariffs on China and 10% on India, and it assumes Apple passes one-third of the incremental costs to customers and suppliers. The firm has a Buy rating and $240 price target on Apple shares, which are down nearly 3% to $196.04 in early afternoon trading.

OTHER HEADLINES: During the quarter, other reporting on Apple’s products and plans have included:

• Apple shaking up iPhone release schedule, The Information reports
• Apple working on new chips for glasses, AI servers, Bloomberg says
• Apple working on curved iPhone, Bloomberg reports
• Apple taking steps to allow users to control iPhone via brain implant, WSJ says
• Apple targeting spring 2026 to release delayed Siri upgrade, Bloomberg reports
• Apple considers theatrical distribution unit amid ‘F1’ bet, WSJ reports
• Apple mulls using AI tech from Anthropic or OpenAI for Siri, Bloomberg says
• Apple plans new Macs, iPhone 17e, iPads for Spring 2026 launch, Bloomberg says
• JPMorgan Chase (JPM) in advanced talks to take over Apple credit card program from Goldman Sachs (GS), WSJ reports

SENTIMENT: Check out recent Media Buzz Sentiment on Apple as measured by TipRanks.