Apple is set to release its second quarter earnings on Thursday with investors looking for a bright outlook after a sales slump.
AAPL – Daily Chart
AAPL trades at $173.49 and can start a new bullish posture with a jump over the $176 level. Disappointing sales could see the stock heading back toward $166.
Apple shares were boosted on Monday as Bernstein upgraded the company ahead of the earnings release.
“AAPL has de-rated significantly amid a weak iPhone 15 cycle and fears that Apple’s China business is structurally impaired,” analyst Toni Sacconaghi wrote. “We believe prevailing weakness in China is more cyclical than structural, and note that historically Apple’s China business has exhibited much higher volatility than Apple overall, given its very feature-sensitive installed base.”
Analysts expect Apple to report earnings of $1.51 per share on $90.6B in revenue. Bernstein, like Wedbush Securities, believes that there will be headwinds in the short-term but sees some positives on the horizon.
Both see a return to growth in the second half with the release of the iPhone 16 and the June WWC conference potentially bringing an AI-led boost to the company’s share price.
Bernstein did cite a “major escalation” in tensions between the US and China as a threat if there are further export bans.
The first event of the year for Apple will be the “Let Loose” event on May 7, where a new iPad and pencil is expected. A positive earnings release could set the company up for further gains around those events in May and June.
