Apple Soars as Positive Forecast Sparks Optimism for iPhone Comeback – One America News Network
By Reuters
January 31, 2025 – 7:12 AM PST
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(Reuters) – Apple shares experienced a 2% increase on Friday, driven by an optimistic outlook that raised expectations for a rebound in iPhone sales, despite ongoing competition and a lack of AI features impacting demand in the crucial Chinese market.
As the world’s most valuable company, Apple (AAPL.O) could see its market capitalization of $3.573 trillion increase by more than $81 billion if these gains are sustained.
Facing investor concerns regarding iPhone demand due to a sluggish introduction of its AI-enhanced Apple Intelligence features, Apple anticipates revenue growth in the low- to mid-single digit percentage range for the current quarter.
This forecast indicates an uptick in demand for the newly launched iPhone 16 series, which debuted in September without many of the Apple Intelligence features, although recent updates have introduced services like ChatGPT integration.
“Concerns had been building ahead of Apple’s first-quarter earnings report. However, the company managed to dispel them effectively,” stated Rosenblatt analyst Barton Crockett.
While Microsoft (MSFT.O) and Alphabet (GOOGL.O) have heavily invested in AI development, Apple has opted for a more measured strategy, concentrating on integrating the technology into device sales rather than significantly increasing capital expenditure.
“With investors keenly focused on how AI investments will translate into real revenue for major tech companies, Apple’s results have offered a degree of reassurance,” remarked Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Nevertheless, China, which ranks as Apple’s third-largest market, continues to be a concern.
The company has yet to establish a local partnership in China to deploy its AI features, while domestic competitors like a resurgent Huawei are eroding its market share with more eye-catching devices.
Apple’s sales in China dropped by 11% in the last quarter of 2024 following a slight decline in the previous quarter.
However, J.P. Morgan analysts noted that recent government stimulus measures could help Apple mitigate this sales decline.
At least 12 analysts have raised their price targets for the stock. Over the past year, Apple shares rose approximately 30%. In comparison, Meta (META.O) was the top performer among Big Tech, jumping over 65%, while Microsoft (MSFT.O) lagged with a 12% increase.
Apple’s 12-month forward price-to-earnings ratio stands at 31.12, compared to 29.2 for Microsoft and 26.7 for Meta.
Reporting by Joel Jose and Siddarth S in Bengaluru; Additional reporting by Samuel Indyk in London; Editing by Amanda Cooper and Shinjini Ganguli
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