Apple Faces Market Downturn Yet Holds Strong Growth Potential
[content-module:CompanyOverview|NASDAQ:AAPL]
As of early March, Apple (NASDAQ: AAPL) is experiencing a decline in its stock price for the year. However, this downturn is not significant in the broader context of the market. Analysts suggest that while the stock may see some price corrections, the overall upward trend remains intact.
This sustained uptrend can be attributed to Apple’s position as an innovative leader in both the mobile and PC markets. Although the company entered the AI sector later than some competitors, it is well-positioned to benefit from advancements in artificial intelligence.
Robust Market Support for Apple
Apple continues to receive strong support from various market players, including retail investors, analysts, and institutional investors. Notably, institutions own nearly 70% of Apple stock. Their purchasing activity has shifted to net buying, increasing significantly from Q3 2024 through the first months of 2025.
In the first quarter of 2025, institutional buying reached multiyear highs, acquiring approximately $6 billion worth of shares—equating to about 1.7% of the market capitalization when shares traded around $235.
Analysts have been similarly optimistic, with numerous positive revisions and upgrades placing Apple on MarketBeat’s Most Upgraded Stock list. In early March, Apple ranked 36th among the 100 most upgraded stocks in the past 90 days. Currently, 36 analysts provide ratings reflecting a Moderate Buy, indicating a bullish outlook with 64% of ratings being Buy or better and positive price target revisions.
The consensus forecast for early March indicates limited immediate upside; however, it reflects a 20% year-over-year increase and a 4% rise since late 2024. After the Q4 2024 earnings release, revisions have adjusted expectations toward the high end, suggesting a potential price of $235 by year-end—representing a nearly 40% gain from the critical support target.
Potential Catalysts from Apple’s FQ2 Outlook
Analysts have set low expectations for Apple’s upcoming FQ2 results. Nearly 90% of analysts have lowered their targets since the Q1 earnings report. This creates an opportunity for Apple to exceed those expectations, with projected top-line growth of 5% and an improved profit margin. Earnings are anticipated to grow around 11%, potentially surpassing forecasts thanks to increased efficiency through AI.
Internally, Apple leverages AI to enhance device performance, optimize resource allocation, improve supply chain management, and enhance customer service. The AI integration also contributes to sales growth by enhancing features within its ecosystem, such as Siri.
The long-term outlook remains equally promising, with analysts forecasting a high-single-digit revenue compound annual growth rate (CAGR) extending through the next decade. Earnings are expected to see a high-teens CAGR in the same period, projecting a valuation of under 10x earnings before 2035. This scenario could see Apple’s stock price rise over 200%, aligning with a future valuation of 32x in March 2025.
Apple’s balance sheet and capital return strategies also influence stock price projections. The company boasts a strong balance sheet with highlights from 2024, including increased cash reserves, reduced debt, and higher shareholder equity despite significant stock buybacks. In Q4, buybacks lowered the quarterly share count by 2.7%, with expectations of continued strong buyback activity in 2025.
Critical Market Thresholds for Apple Stock
In late 2024, Apple’s stock crossed a significant market threshold, reaching an all-time high before retreating to establish support at the 150-day EMA. This pattern indicates a continuation of underlying market trends into 2025, although the timeline for a new peak remains uncertain.
The critical support level is currently anchored at the 30-day EMA, near $230; breaking below this level could signal a deeper drop. Key resistance levels are identified at $250 and $260, with expectations for a rise to $300 if these levels are surpassed.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
