Investing.com -- Apple (NASDAQ:AAPL)'s recent quarterly earnings report yielded mixed results, prompting varying outlooks from analysts on Wall Street.
While iPhone sales and gross margins exceeded expectations, Apple's softer guidance for the December quarter has left some investors cautious about near-term growth.
Bank of America maintained a bullish outlook on the stock, reiterating its Buy rating and $256 price target. Although Apple's revenue guidance for F1Q of "low-to-mid single-digit" growth fell short of expectations, Bank of America considers it "conservative," noting strong iPhone demand and cost efficiencies as positive indicators.
The firm anticipates "incremental opportunities for [services] margins to be structurally higher," driven by Apple's expanding ecosystem and new products like Apple Intelligence.
Citi also remained optimistic, maintaining a Buy rating and $255 price target. Citi's analysts were encouraged by solid iPhone sales, which grew 6% year-over-year, and steady demand for Apple's premium models.
Citi noted that the December quarter is likely to be driven by software updates within Apple's ecosystem, particularly iOS 18.2 and Apple Intelligence features. According to Citi, the guidance is "a relief" given the transition and supports the firm's view of Apple as a long-term growth play.
In contrast, Bernstein struck a more cautious tone despite its Outperform rating, highlighting concerns over a sluggish iPhone 16 cycle and muted revenue guidance. The firm noted that Apple's guidance suggested a weaker holiday season, possibly pointing to flat or declining iPhone revenue growth for fiscal year 2025.
"Given its historical pattern of treading water following iPhone launches," Bernstein suspects Apple's stock may be range-bound in the near term, despite long-term potential for its AI-enabled product lineup.
Piper Sandler lowered its near-term expectations for Apple, emphasizing the iPhone maker's "low-to-mid single digit" guidance for December implies only slight growth in product revenue. With iPhone 16 demand leveling off, the firm sees limited upside for unit sales and reiterated its Neutral rating, with a $225 price target.
Oppenheimer maintained an optimistic stance, highlighting the "strong initial interest in Apple Intelligence." With a higher adoption rate than previous software releases, Oppenheimer believes Apple's AI initiatives will drive an iPhone replacement cycle in 2025, reiterating its Outperform rating.
Despite a mix of cautious and optimistic perspectives, analysts agree that Apple's focus on software and AI-driven upgrades could shape its growth trajectory into 2025.
However, they believe near-term performance may hinge on holiday season demand and the success of Apple Intelligence features.