Apple Set to Report Q4 Earnings: Buy, Sell or Hold the AAPL Stock?

Core Insights - Apple is expected to report its fourth-quarter fiscal 2025 results on October 30, with net sales projected to grow in the mid to high single digits year-over-year [1][2]. Sales and Revenue Projections - The company anticipates fourth-quarter net sales to reach approximately $101.19 billion, reflecting a year-over-year growth of 6.6% [3]. - Services revenue is forecasted to increase by 12.3% to $26.96 billion, driven by an expanding paid subscriber base [9][12]. - iPhone net sales are estimated at $49.75 billion, indicating a 7.6% year-over-year growth [7]. - Mac revenues are projected to rise by 9% to $8.44 billion, supported by strong demand for M4-powered devices [13][14]. Market Performance and Competition - Apple's iPhone accounted for 47.4% of net sales in Q3 fiscal 2025, with sales increasing 13.5% year-over-year [7]. - In China, Apple faces stiff competition from local vendors like Huawei and Xiaomi, with a market share of 15% [8]. - The company has gained market share in the PC segment, with a 9% share according to IDC, up 30 basis points year-over-year [13]. Stock Performance and Valuation - Year-to-date, Apple shares have risen 5%, underperforming the Zacks Computer & Technology sector's return of 26% [18]. - The stock is currently trading at a forward price/earnings ratio of 33.22X, which is higher than the sector average of 29.64X, indicating a stretched valuation [20]. Future Prospects - The launch of new products powered by the M5 chip, including the iPhone 17 and new iPad Pro models, is expected to positively impact sales [23]. - Apple's focus on AI is anticipated to enhance its product offerings and potentially boost Mac shipments in the long run [24].