On Monday, Evercore ISI maintained a positive outlook on shares of Apple Inc. (NASDAQ:AAPL), reiterating an Outperform rating alongside a $250.00 price target. The firm's assessment follows a reported 12% growth in App Store revenue for June, slightly down from May's 15% but still above the anticipated growth rate for the quarter. This performance suggests potential for the Services business to exceed current Street estimates.
The June quarter's App Store growth concluded at 13%, surpassing the 10% growth rate forecasted three months prior. Noteworthy is the robust 30% increase in European Union App Store revenues for June, despite recent regulatory changes from the EU's Digital Markets Act (DMA). This growth indicates resilience in Apple's Services sector, which is heavily reliant on the App Store and Google (NASDAQ:GOOGL) payments.
The Services business, buoyed by the App Store's strong showing, is expected to sustain its double-digit growth trajectory, supported by newer services. While growth rates in China and the United States remained relatively unchanged, Japan experienced a more pronounced year-over-year decline in June, falling 13% compared to a 7% drop in May.
Evercore ISI's commentary suggests that while the remainder of the 2024 calendar year may present increasing challenges, resulting in potential deceleration, such trends have not yet emerged. The analyst's statement underscores the solid performance of the App Store and its contribution to the overall health of Apple's Services business, reinforcing the decision to maintain the Outperform rating and $250 price target for Apple shares (NASDAQ:AAPL).
In other recent news, Nvidia (NASDAQ:NVDA) briefly surpassed tech giant Microsoft (NASDAQ:MSFT) in market value, experiencing a surge that raised its value to $3.34 trillion. Meanwhile, Amazon.com Inc (NASDAQ:AMZN) joined the $2 trillion market value club, largely due to growing excitement around AI technology. Broadcom (NASDAQ:AVGO) Inc also reported a significant increase in market cap following a raised annual revenue forecast for AI-related chips and a declared stock split.
The National Bank of Hungary has ordered banks to reimburse clients affected by a technical glitch in Apple's electronic payment service, resulting in approximately 780,000 erroneous transactions. This follows an analysis by the central bank revealing the error was tied to a technical issue with Apple's international bank card partner.
India's Congress Party has challenged Foxconn, a key supplier for Apple, over alleged discrimination against married women in employment. Both Apple and Foxconn have admitted to lapses in their hiring processes and claim to have taken corrective measures. However, allegations of continued discriminatory practices have sparked widespread debate and calls for investigation.
The United States and India have agreed to extend their pause on retaliatory measures over India's digital-services tax. This extension aligns with the ongoing negotiations on the "Pillar 1" tax agreement, which aims to reallocate taxing rights to the most profitable global companies.
The women's wing of India's Bharatiya Janata Party has called for an investigation into Foxconn's hiring practices following claims of discrimination against married women. Apple and Foxconn have previously admitted to hiring lapses and claim to have addressed these issues, but recent incidents suggest that challenges remain.
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As Apple approaches its next earnings date on July 24, 2024, investors will be keen to assess whether the company's performance aligns with the positive outlook from Evercore ISI. With the Services business, particularly the App Store, playing a critical role in Apple's revenue stream, the company's ability to sustain growth amidst regulatory changes and market fluctuations will be closely watched.
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