Apple shares climbed 2% on Friday, adding over $81 billion to its $3.573 trillion market value, as a positive forecast raised hopes of an iPhone sales rebound.
Despite concerns over weak demand, Apple expects revenue to grow in the low- to mid-single digits this quarter. The forecast hints at improving demand for the iPhone 16 series, which launched without AI features but recently gained updates like ChatGPT integration.
“Fears had mounted before Apple’s earnings report, but the company turned them around,” said Rosenblatt analyst Barton Crockett.
Unlike Microsoft and Alphabet, which have heavily invested in AI, Apple has taken a cautious approach, focusing on device sales rather than massive AI spending. “Apple’s results provide reassurance to investors watching AI monetization closely,” said Susannah Streeter of Hargreaves Lansdown.
However, China remains a challenge. Apple has yet to find a local AI partner, and rivals like Huawei are chipping away at its market share. Sales in China dropped 11% in late 2024, following a slight decline in the previous quarter.
J.P. Morgan analysts believe recent government stimulus measures could help stabilize Apple’s China sales.
At least 12 analysts raised their Apple price targets. The stock gained about 30% last year, trailing Meta’s 65% surge but outperforming Microsoft’s 12% rise. Apple’s 12-month forward P/E ratio stands at 31.12, higher than Microsoft’s 29.2 and Meta’s 26.7.
Also read: Trump Administration Considers Tighter AI Chip Restrictions on Nvidia Sales to China
