Apple shares (NAS100:AAPL) are hovering at key resistance ahead of the latest Q1 earnings release, with iPhone sales fighting against expenses and compeititon.
AAPL – Weekly Chart
AAPL shares are hitting resistance at the same $260 level that capped gains in late-2024.
Wall Street analysts are adjusting expectations for Apple shares ahead of the company’s first-quarter earnings report, after the close on Thursday. Resilient iPhone demand has been combating cost pressures, increased competition, and slower growth in the services industry.
Consensus estimates for the iPhone maker are for revenue of $138.4 billion and earnings per share of $2.67 for the December quarter. The numbers are expected to show a minimum of 11% year-over-year growth in EPS and revenue, but analysts are now reducing margin forecasts despite strong iPhone sales.
Another issue for analysts in the Q1 2026 earnings are whether iPhone strength can offset margin pressures and rising operating expenses. Apple’s earnings have continued to expand in recent years despite a rise in competition from the likes of Samsung and Huawei. Big tech rival Google has also been gaining ground in AI-driven hardware and software.
Morgan Stanley analyst Erik Woodring has a target of $315 for AAPL, but cautioned investors that the stock could “trade sideways to modestly lower after earnings”.
The investment bank sees cost assumptions as overly optimistic, with a forecast for March-quarter operating expenses at 7% above consensus and a gross margin forecast 30 basis points below consensus, driven by rising memory costs.
Analysts also see downside risk into the June quarter, with EPS estimates of $1.62 versus the consensus of $1.71, due to the memory-related cost pressures. Historical data has also shown that Apple has underperformed the S&P 500 more in Q1 than in any other period.
The coming earnings release will determine whether the latest dip in the stock price is a larger correction, rather than a short-term blip.
