Apple(US:AAPL)2026-01-21 02:58Summary of Apple Inc. (AAPL) Earnings Preview Company Overview - Company: Apple Inc. (AAPL) - Market Cap: $3.8 trillion - Current Price: $255.53 - Target Price: $320.00 - YTD Stock Performance: Down 5% Key Financial Metrics - Forecasted F1Q26 EPS: $2.66, in line with FactSet consensus [2] - Forecasted Revenue for F1Q26: $137.4 billion, representing an 11% year-over-year growth [2] - iPhone Revenue Forecast: $78.0 billion, up 13% year-over-year [30] - Services Revenue Growth: Expected to grow 14% year-over-year [18] - Gross Margin Forecast: 47.7%, near the midpoint of guidance [18] Core Insights iPhone Performance - iPhone Revenue Growth: Expected to grow 13% year-over-year, driven by a 5% increase in unit sales and an 8% increase in average selling price (ASP) [30] - iPhone Demand Drivers: - Strong performance of the iPhone 17 generation, with higher lead times indicating robust demand [31] - Seasonal demand during holiday shopping [32] - Refresh of aging devices purchased during the pandemic [34] - Future Outlook: Anticipated continued demand for the iPhone 17 series and the introduction of the foldable iPhone in September 2026 [34] Services Segment - Services Revenue: Expected to grow 14% year-over-year, supported by categories like iCloud+, AppleCare+, and new ad formats in the App Store [18] - App Store Growth: Although App Store spending is decelerating (+7% year-over-year), overall Services growth remains strong [18] Cost and Margin Considerations - Memory Cost Inflation: Rising DRAM/NAND prices may impact product margins, with potential increases in memory costs from $30 to $70 per chip [25] - Mitigation Strategies: Apple may leverage its supply chain, redesign systems, or raise prices to protect margins [25][26] - Worst-case Scenario: If memory prices increase significantly, product gross margins could decline by 8-10 percentage points [27] Additional Considerations - Market Position: Apple is well-positioned to mitigate cost pressures compared to lower-cost competitors due to its premium product offerings and brand loyalty [26] - Future Product Launches: The shift to a biannual iPhone release strategy may impact unit sales and ASPs in the coming years [35] Conclusion - Investment Outlook: Despite current stock weakness, the anticipated continuation of the iPhone refresh cycle and strong Services growth present a buying opportunity for investors [1]