Should You Buy, Sell, or Hold Apple Stock Before Q2 Earnings?

Core Viewpoint - Apple is expected to report second-quarter fiscal 2025 results on May 1, with projected revenue growth in the low to mid-single digits year-over-year, and a low double-digit growth rate for the Services segment [1][2]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for fiscal second-quarter revenues is $93.56 billion, indicating a 3.09% year-over-year growth [1]. - The consensus mark for earnings is $1.60 per share, reflecting a 4.58% increase from the previous year [2]. iPhone Sales Performance - iPhone sales are anticipated to decline, contributing 55.6% of net sales in the first quarter of fiscal 2025, with a year-over-year decrease of 0.8% to $69.14 billion [3]. - The Zacks Consensus Estimate for fiscal second-quarter iPhone net sales is $45.674 billion, suggesting a 0.6% year-over-year decline [4]. Services Segment Growth - The Services segment is expected to show steady growth, driven by an expanding paid subscriber base, with over 1 billion paid subscribers across various services [5]. - The consensus mark for Services revenue is $26.176 billion, indicating a 12% year-over-year growth [6]. Mac Sales Outlook - Apple's Mac sales are projected to rise, with a market share of 8.7% in the first quarter of 2025, reflecting a 14.1% year-over-year shipment growth to 5.5 million units [7]. - The consensus mark for Mac revenue is $7.791 billion, suggesting a 4.6% year-over-year growth [9]. Stock Performance - Apple shares have returned 16.4% year to date, underperforming the Zacks Computer & Technology sector's return of 11.1% [10]. - The stock is trading at a forward Price/Earnings ratio of 27.77X, higher than the sector average of 23.41X, indicating a stretched valuation [13]. AI Developments - Apple has expanded the availability of Apple Intelligence across various platforms and languages, which is expected to enhance its market position and aid PC shipments in the long run [17][18].