Tech juggernaut Apple (AAPL) is set to report its third-quarter results for fiscal 2026 on July 30, after the market closes. Before that, Apple was enjoying its time on Wall Street, as it recently surpassed chipmaker Nvidia (NVDA) to become the most valuable company, claiming the spot at market close for the first time since April 2025. This proves to be a significant win for Apple ahead of its quarterly results, which might reveal the financial impact of the memory chip shortage.
Let's take a closer look at Apple now and where it could go from here.
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About Apple Stock
There’s not much that needs to be said about the iPhone maker. Apple has been a Wall Street stalwart, as its products have permeated across the world. Apart from iPhones, the company also sells AirPods, Apple Vision Pro, Apple TV, Apple Watch, and third-party accessories. Headquartered in Cupertino, California, Apple currently has a market capitalization of $4.95 trillion.
The last iPhone refresh cycle has been significantly robust. iPhone 17s have been flying off the shelves since their launch last fall, and this trend has continued well into the second quarter. Apple’s growth has also been aided by its high-margin service offerings. Over the past 52 weeks, AAPL stock has gained 58%, while it is up 25% year-to-date (YTD). The company’s shares hit a 52-week high of $342.89 during today's trading session and are only down marginally from that level.
Apple’s stock does not come cheap, of course. Given its earnings growth, its price-to-earnings ratio of 38.45x is on the high side, especially compared with the industry average of 30.98x.
www.barchart.com The Noise Surrounding Apple
On the cusp of Tim Cook stepping down as CEO, after nearly 15 years of leading Apple and expanding its reach, the company has been hit with price increases. For quite some time, the company’s solid moat has shielded its customers from price increases. However, last month, Apple was forced to raise prices to pass on higher memory and storage costs.
Although it doesn’t affect its moneymaker iPhone, further price increases could affect the product. Counterpoint Research estimates higher component costs, adding roughly $200 per iPhone for Apple. Moreover, as the company adds more AI features to its stellar smartphone, it will require more memory, potentially increasing unit costs.
It looks like Apple has found a possible way around the issue. In a partnership with BNPL provider Klarna (KLAR), the company is launching an Upgrade program that lets customers lease an iPhone for up to two years.
Price rises aside, the company has shown that it remains a stalwart with the last iPhone 17 upgrade cycle (although smaller price tags have contributed to that). Moreover, this trend has continued well into the second quarter, with the company dominating the smartphone market and the iPhone accounting for 20% of global sales.
What once felt like Apple falling behind in the AI race has now given way to appreciation for a different approach. While rivals pour money into AI infrastructure, Apple has a much more measured approach. Rather than building it all in-house, the company has chosen to rely on a combination of first- and third-party capacity, which frees up more cash. So far, discipline seems to be a winning strategy.
Apple’s Q2 Results Topped Expectations
As iPhone achieved the March-quarter record, Apple reported record second-quarter results for fiscal 2026. The company’s revenue increased by 16.6% year-over-year (YoY) to $111.18 billion, exceeding the $109.48 billion expected by Wall Street analysts. This was led by iPhone sales increasing 21.7% YoY to $56.99 billion and Services revenue growing 16.3% to $30.98 billion. The company’s EPS was $2.01, up 21.8% YoY and exceeding the $1.92 expected by Street analysts.
Wall Street analysts are robustly optimistic about Apple’s future earnings. For the current fiscal year, EPS is projected to surge 17.4% annually to $8.76, followed by a 9.3% growth to $9.57 in the next fiscal year. Analysts also expect the company’s EPS to grow 19.8% YoY to $1.88 in the upcoming third quarter of fiscal 2026.
What Do Analysts Think About AAPL Stock?
This has been an interesting month for Apple when it comes to Wall Street analysts’ opinions on its stock. On the one hand, analysts at KeyBanc downgraded AAPL from “Sector Weight” to “Underweight” and set a $250 price target. Analyst Brandon Nispel has cited slowing hardware demand and its elevated valuation for this rare bearish stance. Moreover, wireless carriers have discussed reducing device subsidies, which could slow smartphone replacement cycles.
On the other hand, HSBC analysts, seeing an entirely different picture, upgraded AAPL stock from “Hold” to “Buy” and raised the price target from $260 to $366. HSBC analysts argue that although Apple has restrained AI spending compared to other big tech names, it still benefits from AI exposure through its millions of installed devices. They also believe that the company would have a strong hardware roadmap over the next couple of years.
Apple has long been a popular name on Wall Street, with analysts awarding it a consensus “Moderate Buy” rating overall. Of the 42 analysts rating AAPL stock, 23 have given it a “Strong Buy” rating, three a “Moderate Buy,” 14 a “Hold,” and two a “Strong Sell.” The consensus price target of $321.35 represents a 5.5% downside from current levels. However, the Street-high price target of $400 implies an 18% upside.
www.barchart.com On the date of publication, Anushka Dutta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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