Why Is Barclays Still Underweight On Apple Despite Strong Q1 Earnings?

Barclays flagged ongoing supply constraints that continue to limit the potential upside in iPhone shipments.

• Barclays raised Apple’s price target to $239, still implying a 7% downside from Thursday’s close. 
• The firm cited potential headwinds emerging from volatile memory chip market dynamics and the possibility of corrections in China’s broader tech sector.
• The iPhone maker’s Q1 revenue of $143.8 billion and earnings per share of $2.84 both exceeded Street estimates. 

Barclays lifted its price target on Apple Inc. (AAPL) to $239 from $230 while maintaining an ‘Underweight’ rating on the stock, signaling that the firm still sees more potential downside than upside in the near term. The revised price target still implies a potential 7% downside to the stock’s closing price as of Thursday, according to TheFly.  

Apple stock inched over 0.4% higher in Friday’s premarket. 

Analyst Rationale 

Barclays stated that Apple’s fiscal first-quarter (Q1) results showed robust iPhone sales, with particularly strong performance in Greater China. That region’s rebound has been a focal point for industry watchers, and its contribution helped lift expectations for the revenue outlook in the current quarter.

According to the firm, Apple has raised its fiscal second-quarter revenue and gross margin guidance above prior projections. However, Barclays flagged ongoing supply constraints that continue to limit the potential upside in iPhone shipments, even as consumer interest remains solid.

Risk Factors

Barclays also underscored mounting risks for Apple’s stock performance. They cited potential headwinds emerging from volatile memory chip market dynamics, the possibility of corrections in China’s broader tech sector, and intensifying regulatory and competitive pressures as areas of concern for future growth.

In the wake of rising memory costs, a Reuters report said Apple is focusing first on manufacturing and shipping its three most expensive iPhone models for 2026, while pushing back the launch of its standard version.

The iPhone maker’s Q1 revenue of $143.8 billion and earnings per share of $2.84 both exceeded the analysts’ consensus estimate of $138.22 billion and $2.67, respectively, according to Fiscal AI data. Apple’s China sales jumped about 38% year-on-year to $25.5 billion in Q1. 

What Are Stocktwits Users Saying

Contrary to Barclays, on Stocktwits, retail sentiment around the stock changed to ‘extremely bullish’ from ‘bullish’ territory the previous day. Message volume also shifted to ‘extremely high’ from ‘high’ levels in 24 hours. 

A bullish Stocktwits user said Apple, with its large consumer base, is moving closer to monetizing AI. 

AAPL stock has gained over 8% in the last 12 months. 

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