A burgeoning enthusiasm surrounding Apple Inc.‘s (NASDAQ: AAPL) iPhone 17 has fostered optimism regarding the anticipated foldable iPhone 18, thereby invigorating analysts’ projections for the company’s long-term growth trajectory.
JPMorgan analyst Samik Chatterjee articulates that the Cupertino titan approaches its forthcoming earnings announcement buoyed by its most favorable investor sentiment in over a year.
Chatterjee posits that enhanced metrics pertaining to iPhone demand, alongside stabilization within Apple’s broader operational ecosystem, have been pivotal in rejuvenating investor trust. He elaborates:
- The Services segment is experiencing robust performance, achieving approximately 13% growth in the fiscal third quarter, with projections indicating continued momentum into the fourth quarter, defying concerns surrounding potential slowdowns due to new “link-out” payment alternatives.
- A recent judicial decision in the Alphabet Inc. (NASDAQ: GOOGL) Google–DOJ litigation implies negligible repercussions on Google’s traffic acquisition expenditures to Apple, thereby bolstering the stability of Services revenue.
- An accelerated transition of manufacturing operations beyond China—particularly towards India and Vietnam—combined with heightened investments in the U.S., has mitigated the company’s exposure to tariffs and supply chain vulnerabilities.
Chatterjee observes that the prevailing optimism surrounding Apple’s stock is primarily anchored in the sales performance of the iPhone 17 and the prospects for the iPhone 18 series, likely to feature the company’s inaugural foldable device.
“Amid a favorable product cycle with the iPhone 17 series, coupled with expectations for another vigorous cycle featuring the foldable iPhone 18, we anticipate that the valuation multiple assigned to the shares could yield higher-than-expected benefits beyond forthcoming earnings revisions,” Chatterjee notes.
Apple Forecast
Looking forward, Chatterjee projects that Apple will attain high single-digit revenue growth for both the fiscal fourth-quarter of 2025 and the fiscal first-quarter of 2026.
He anticipates fourth-quarter revenue of $103 billion and earnings per share (EPS) of $1.81, surpassing the consensus estimates of $102 billion and $1.77.
The forthcoming product cycles—the current iPhone 17 range along with the impending iPhone 18—are expected to catalyze revenue growth through fiscal years 2026 and 2027, Chatterjee asserts.
These elements, in conjunction with the easing of tariff pressures and improved operational efficiencies, should propel margin expansion and upgrade earnings.
Chatterjee emphasizes that Apple’s distinct clarity regarding a multi-year product roadmap, paired with adept execution in both Hardware and Services, bolsters the potential for further stock appreciation.
Price Action: Apple shares rose by 1.15% to $265.90 in the latest trading session on Monday.
Source link: Benzinga.com.
