Apple Stock Lags ‘Mag 7’ Peers: Analyst Sees ‘Solid’ iPhone Revenue Amid Risk Of Higher Memory Costs

UBS said rising memory chip prices prompted Apple and its partners to produce more iPhones, leading to slightly higher-than-expected sell-through in the December quarter.

• Apple shares slid 3.5% on Tuesday, amid a broad market sell-off.
• The iPhone maker will report Q1 results on Jan. 29, with analysts expecting the strongest revenue growth in nearly six years.
• The iPhone 17s are off to a great start, boosting Apple's market share to the top in China last quarter.

Apple, Inc.’s stock is drawing renewed investor interest after a sharp pullback in recent sessions, even as third-party data points to strong sales of the latest iPhone 17 lineup that could bolster the company’s fiscal first-quarter results due next week.

UBS’s Take

Besides organic demand, iPhone 17 sales were also boosted by a slight overproduction by Apple in response to expectations of rising memory chip costs, UBS analysts said in a recent note. That led to slightly higher-than-expected sell-through in the December quarter, the analysts said, estimating 12% to 13% growth in sales to 84.5 million to 85.0 million iPhone units.

UBS maintained a ‘Neutral’ rating and $280 price target on AAPL stock, according to The Fly. That compares to 29/49 ‘Buy’ or higher calls, 17/49 ‘Hold’ calls, and an average $287.59 (16.5% upside) target from analysts, according to Koyfin.

iPhone 17 Shines

Strong early sales of the iPhone 17 lineup have provided a notable lift in Apple’s long-subdued China market, according to Counterpoint Research, which tracks smartphone shipments globally.

iPhone shipments to China jumped 28% in the holiday quarter, lifting Apple to the top spot in the market with a 22% share. The iPhone 17s accounted for 20% of Apple's phone shipments in the quarter, with demand concentrated particularly on the Pro models. 

That said, overall smartphone shipments to China declined 1.6% in Q4 and fell 0.6% for the full year, reflecting weaker consumer demand driven primarily by rising prices.

Stock, Earnings Expectations

Apple shares dropped 3.5% on Tuesday, their steepest drop since May last year, amid a broader market sell-off in response to rising geopolitical risk from U.S. President Donald Trump’s plans to take control of Greenland. That puts Apple’s year-to-date declines at 9.3%, the highest in the “Maginificent Seven” group.

Apple will report December-quarter results on Jan. 29, with expectations of strong iPhone performance (see the chart of past iPhone sales). Analysts expect revenue to rise 11.4% to $138.5 billion – its highest pace since the September quarter of 2018 – and adjusted profit by over 11% to $2.67 per share, according to consensus estimates on Koyfin.

Note: Quarters are referenced by the calendar year; Apple follows a different fiscal year. <

About 30% of respondents in a Stocktwits poll said they believe Apple stock will pull back initially as the tech earnings season kicks off, while 31% say it will ‘slowly grind higher’ – signaling a cautiously optimistic view.

On Stocktwits, retail sentiment for AAPL held in the ‘bullish’ zone, unchained from the previous day.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<