The holiday quarter is typically a sweet spot for Apple (NASDAQ:AAPL), when gift purchases and seasonal upgrades combine to drive a surge in device demand. That backdrop sets the stage for today’s fiscal Q1 2026 (December quarter) earnings report, as investors brace for what they hope will be a strong showing.
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Getting down to brass tacks, Wall Street is predicting that Apple will hit a new revenue record of $138.39 billion. The expected EPS of $2.67 would represent a year-over-year increase of some 11%, though the company has a strong track record of outpacing earnings estimates.
The market, of course, is eager to understand how its new iPhone 17 product line is faring. CEO Tim Cook helped stoke the excitement during the company’s last quarterly call, declaring that “we expect the December quarter’s revenue to be the best ever for the company and the best ever for iPhone.”
That bullish tone stands in contrast to recent price action. Apple shares have cooled off in recent weeks, though they are still not far from their all-time high. Will a strong earnings report be just what the stock needs to get its groove back?
Not according to one top investor, known by the pseudonym Stone Fox Capital. Though Stone Fox expects the company to report a solid quarter, the 5-star investor believes that this will be where the music stops.
“The big question is whether the rebounding growth rate is sustainable, and all signs suggest this isn’t the case,” explains Stone Fox, who is among the top 3% of stock pros covered by TipRanks.
The investor’s biggest concern stems from Apple’s AI strategy, or lack thereof. Stone Fox points out that the company’s recently announced partnership with Alphabet doesn’t exactly solve this issue, as the company will be paying for the use of Google’s Gemini models and cloud technology.
“Apple enters 2026 with no working AI solution yet and no real plans to monetize AI other than selling more iPhones,” Stone Fox emphasizes.
And that plan may hit some potholes, warns the investor. Stone Fox cites an IDC report that iOS smartphone sales will dip next year, in part due to memory supply shortages.
Though the investor acknowledges that AAPL recently hit an all-time high, Stone Fox also cautions that the company has underperformed the market over the past few years. Needless to say, the investor predicts this lag will continue.
“Investors should’ve used the recent run to all-time highs to cash out since the current price is still very expensive for a company not even participating in the growth area of the next decade,” concludes Stone Fox, punctuating the harsh words with a Strong Sell rating. (To watch Stone Fox Capital’s track record, click here)
Wall Street clearly doesn’t think that AAPL has missed the AI boat, however. With 19 Buys, 11 Holds, and 2 Sells, AAPL enjoys a Moderate Buy consensus rating. Its 12-month average price target of $298.84 points to an upside of ~16%. (See AAPL stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.