Apple shares surged in early trading on May 3, poised to recover most of their year-to-date losses following the tech giant’s strong earnings report. The report alleviated concerns about slowing demand in China and highlighted the company’s commitment to adopting AI technologies.
Apple (AAPL), previously one of the weakest performers among the Magnificent 7 stocks this year, surprised the market with its March quarter earnings report. The report included record services revenue of nearly $24 billion, which partially offset another decline in iPhone sales.
Although Apple’s overall revenue for the quarter fell 4.3% year-over-year to $90.8 billion, it exceeded Wall Street expectations. The company also announced a record $110 billion share buyback and a 4% increase in its dividend to 25 cents per share.
During a call with analysts and investors, CEO Tim Cook outlined the company’s AI ambitions for the coming year. He hinted at upcoming announcements from the World Wide Developers Conference on June 10, stating, “We continue to feel very bullish about our opportunity in generative AI.”
Morgan Stanley analyst Erik Woodring commented, “It’s hard not to be more bullish after that,” as he raised his price target on Apple to $216 per share and maintained an overweight rating.
Other analysts also expressed optimism. Evercore ISI analyst Amit Daryanani highlighted Cook’s tone on the call as key to the market’s bullish reaction. He maintained an outperform rating and a $220 price target.
JP Morgan analyst Samik Chatterjee raised his price target on Apple to $225 per share, citing the company’s “better-than-feared” results and resilient iPhone revenue guidance.
CFRA analyst Angelo Zino noted the improving China data and said, “We believe these results appear to change the narrative on the Apple story.”
Wedbush analyst Dan Ives stated, “iPhone demand is now starting to slowly turn the corner in China along with a robust services performance.” He maintained his outperform rating and a $250 price target.
Apple’s stock price rose 6.6% in Friday trading to $184.44 per share, reducing its 2024 decline to around 0.6%.
