<\/p>\n
Apple\u2019s Q2 earnings report gave Wall Street a lot to like.<\/p>\n
Bank of America analysts were all praise for the Cupertino giant\u2019s performance, giving them enough confidence to raise their price target to $330 (18% higher than current prices), while keeping a buy rating.<\/p>\n
Q2 was another massive beat-and-raise quarter, with Apple surging past estimates on both lines over the past four quarters by a wide margin.\u00a0<\/p>\n
However, BofA analysts now frame the next test around Apple\u2019s Q3 Services momentum, which could keep its bull case alive and potentially lead to a richer multiple.\u00a0<\/p>\n
That matters because Apple stock trades at a nosebleed valuation, nearly 32 times forward non-GAAP earnings, about 11% above its five-year average, according to Seeking Alpha.\u00a0<\/p>\n
In terms of sales, the picture gets even murkier, with the stock trading at nearly nine times sales, about 167% above the sector median.<\/p>\n
In its newest Q3 update, BofA said App Store revenue rose 3.7% year over year after 33 days, reaching $3.2 billion.<\/p>\n
Given the current setup, it\u2019s clear that while strong demand has opened the door, recurring digital sales are what underpin and justify a richer multiple for Apple stock.<\/p>\n
Wall Street price targets for Apple stock after earningsWedbush set Apple\u2019s price target at $350.TD Cowen raised Apple\u2019s price target to $335.Morgan Stanley raised Apple\u2019s price target to $330.Wells Fargo raised Apple\u2019s price target to $310.UBS raised Apple\u2019s price target to $296.Barclays raised Apple\u2019s price target to $253.
\nSources: StockAnalysis.com, Benzinga
\nBofA stays bullish on Apple after earnings\u00a0The bank reiterated its buy rating on Apple stock while raising its price target from $325 to $330.March-quarter sales jumped 16.6% to $111.2 billion, blowing past Wall Street\u2019s $109.3 billion estimate.EPS skyrocketed 22% to $2.01, comfortably above the consensus of $1.94.iPhone revenue spearheaded things, jumping 21.7% to $57 billion, led by the iPhone 17 family and record upgraders.Services revenue also increased by 16.3% to $31 billion, while gross margin was at a lofty 49.3%.<\/p>\n
BofA analysts remained unequivocally bullish on Apple stock post earnings, mostly on the back of robust iPhone demand and stronger China trends.\u00a0<\/p>\n
What stood out the most was its ability to weather the memory storm, posting relatively strong margins, despite the headwinds.\u00a0<\/p>\n
As we look ahead, the firm sees significant upside from AI-powered Siri, a foldable iPhone, and ongoing shareholder returns.\u00a0<\/p>\n
On the flip side, it pointed to potential risks stemming from a potentially sluggish iPhone cycle, tariff pressures, and a stronger dollar.<\/p>\n
Bank of America raises its Apple price target after strong earnings, highlighting growing confidence in services momentum.<\/p>\n
NIC COURY/AFP via Getty Images<\/p>\n
Apple stock returns vs. the S&P 5001M: 8.41% versus the S&P 500\u2019s 10.12%6M: 2.50% versus the S&P 500\u2019s 5.86%YTD: 1.93% versus the S&P 500\u2019s 5.78%1Y: 29.91% versus the S&P 500\u2019s 29.21%3Y: 63.41% versus the S&P 500\u2019s 73.73%5Y: 110.80% versus the S&P 500\u2019s 73.18%
\nSource: Seeking Alpha
\nBofA sees Apple Services’ momentum building<\/p>\n
BofA analysts expect Apple\u2019s momentum to continue, driven in part by strength in its Services segment.\u00a0<\/p>\n
For perspective, roughly five years ago in fiscal 2020, Apple\u2019s Services business generated $53.8 billion out of Apple\u2019s $274.5 billion in net sales (19.6% of revenue).\u00a0<\/p>\n
By fiscal 2025, that number more than doubled to $109.2 billion (26.2% of Apple\u2019s $416.2 billion in sales).<\/p>\n
More AI:<\/p>\n
Micron sits at the center of a red-hot chip rallyIBM CEO sends blunt message on AI and quantum computingAnthropic CEO makes shocking admission about AI<\/p>\n
To understand the importance of Apple’s services division, picture the iPhone as a stadium.\u00a0<\/p>\n
However, the Services side includes concessions, ticket fees, and parking, essentially the revenue generated after the customer walks in.\u00a0<\/p>\n
Apple\u2019s latest quarterly results reinforced that view, with Services sales of $31 billion constituting 28% of total sales.\u00a0<\/p>\n
Consequently, the bank is modeling an eye-catching 14% year-over-year increase in sales growth for fiscal Q3 on the services side, even as it sees App Store data showing a more measured, yet still positive, start.<\/p>\n
After the first 33 days, App Store sales rose 3.7% to $3.2 billion, up from $3.1 billion a year earlier.<\/p>\n
Downloads increased just 0.7% to 3.12 billion, but spending per download moved 3% to $1.01, underscoring Apple\u2019s ability to generate higher incremental sales from each user interaction.<\/p>\n
Results in April tracked a lot better, with global App Store sales rising 4.4% while downloads rose only 0.8%.\u00a0<\/p>\n
The highlight was China, where App Store sales leapt 10.2%, its first double-digit growth since April 2025.<\/p>\n
At the same time, the sales mix is changing.<\/p>\n
Games remained the largest App Store category, accounting for 42% of sales, but their share was down substantially.<\/p>\n
Productivity increased by 242 basis points, or 7%, led by higher demand for AI-related apps. On top of that, ChatGPT generated more than $240 million in April App Store sales, while Gemini reached about $7 million.<\/p>\n
Related: Bank of America revamps Amazon stock target after earnings<\/p>\n
#Bank #America #resets #Apple #stock #price #target #earnings<\/p>\n","protected":false},"excerpt":{"rendered":"
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