To The Moon

$Apple(AAPL)$ is set to report FY25 first-quarter earnings results after market close on 30 Jan 2025 (Thursday).

Apple's Q1 revenue is expected to be $124.318 billion, adjusted net income is $35.527 billion, and adjusted EPS is $2.352, according to Bloomberg's consistent expectations.

Market is expecting consensus forecast of $2.35 earnings per share.

Apple (AAPL) Last Earnings Call Positive Yet Only 5% Change Since

Apple has only gotten 5.58% change since its last earnings call on 31 Oct 2024 which has a positive sentiment.

The earnings call highlighted strong overall growth, particularly in iPhone and Services revenue, along with significant product innovations and expansion in emerging markets.

However, there were challenges in the Wearables segment and concerns over rising component costs. Overall, the positive developments largely outweigh the negatives.

Apple Ongoing Product Innovations To Watch For Guidance

In the Q4 2024 earnings call, Apple provided a comprehensive overview of its financial performance and future guidance. The company reported a September quarter record revenue of $94.9 billion, a 6% increase year-over-year, with strong iPhone sales contributing $46.2 billion, a 6% growth.

Services also set an all-time revenue record of $25 billion, up 12% from the previous year. Gross margin was 46.2%, with product margins at 36.3% and services at 74%. Operating expenses were reported at $14.3 billion.

Looking forward, Apple expects total company revenue to grow low to mid-single digits in the December quarter, with service revenues maintaining a similar growth rate. The company also highlighted ongoing product innovations, such as Apple Intelligence, which is expected to drive future growth.

Factors That Might Affect Revenue and Growth

With the recent development in AI models, if AI ecosystem progress in efficient models like DeepSeek, this could help Apple as it could trigger device upgrades.

Record Revenue and Growth But Wearables and Mac Revenue Decline A Concern

Apple reported a September quarter revenue of $94.9 billion, up 6% year-over-year, marking a record for the quarter. iPhone revenue set a September quarter record of $46.2 billion, up 6% with growth in every geographic segment. Services revenue reached an all-time record of $25 billion, up 12% year-over-year.

Apple saw the revenue for Wearables, Home, and Accessories was $9 billion, down 3% year-over-year. Mac revenue grew only 2% year-over-year, which may indicate slower growth in this segment compared to others.

NAND and DRAM prices increased during the September quarter and are expected to continue rising, putting pressure on gross margins.

I am expecting the prices increase in memory to affect Apple in the reported quarter, and we could be seeing slower growth in their wearables and Mac as their biggest market China has consumers slowing down on their festive shopping.

Product Innovations and Releases

Apple introduced the Apple Intelligence system, a new personal intelligence system, and launched the iPhone 16, Mac with M4 chips, and new iPads, along with updates to Apple Watch and AirPods.

Strong Services Growth

Services revenue reached a new all-time high of $25 billion. Paid subscriptions grew double digits, and Apple surpassed 1 billion paid subscriptions across its services.

Expansion in Emerging Markets

Apple achieved September quarter revenue records in several countries, including India, where it set an all-time revenue record.

Environmental Milestones

Apple introduced its first-ever carbon-neutral Mac and offers a carbon-neutral option for any Apple Watch, aiming to be carbon neutral across its entire footprint by 2030.

Apple (AAPL) Price Target

Based on 30 Wall Street analysts offering 12 month price targets for Apple in the last 3 months. The average price target is $243.24 with a high forecast of $324.00 and a low forecast of $183.00. The average price target represents a 2.09% change from the last price of $238.26.

Apple might continue to face a headwind from the macro environment in the first half of 2025, but as market focus on DeepSeek and efficient AI models could accelerate AI app innovation and mobile upgrades.

Hence, with a stable margins combined with richer selling price, this might help to reduce the concerns over the revenues from its wearable and Mac business.

I would think Apple could be trading near the $250 level if these positive factors continue.

Technical Analysis - Exponential Moving Average (EMA)

Apple was up 3.65% on Wednesday (29 Jan), the reason why Apple was down when most others was down is because Apple already went through its selloff and was daily oversold.

Bulls are looking for a bounce and it seem to be working well as Apple seem to spend the least amount of money on their AI venture so far, this mean they have lots of cash which they are able to deploy elsewhere.

Hence, this might be the factors that shield them from the two days selloffs, now from the technicals, we are seeing that Apple has established a new daily uptrend before it was a beautiful daily downtrend for the bears.

But from the new daily uptrend sequence , we are seeing rejection from 238 where 231 is the resistance, though Apple have upcoming earnings report but it seems to be clear that Apple is trapped between the overhead resistance and below support culminating in the 221.

Not forgetting we have Fed FOMC meeting and DeepSeek saga still ongoing, but I am expecting around 4% up or down movement.

Bulls are coming back with a nice daily uptrend and it is nice to see the bulls recapture a bit, just above the 12-EMA.

So I will be watching how Apple trade on 29 Jan 2025 before its earnings with FOMC meeting in view.

Summary

I am expecting Apple to move both directions with 4% change, if Apple manage to impact its revenue slowdown in wearables and mac, with FOMC decision being positive, we could see a nice 4% upside, else if DeepSeek and FOMC cames in unfavourable, we could see Apple losing 4%.

Appreciate if you could share your thoughts in the comment section whether you think Apple would be able to provide a better EPS if their revenue in wearables and mac improve.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.