Apple Bear Holds ‘Muted’ View On December Quarter Amid Regulatory Headwinds, Lukewarm iPhone Sales: Retail Sentiment Sours

Apple, Inc. ($AAPL) is scheduled to report its fiscal year first quarter results after the market closes on Thursday, Jan. 30, and an analyst said he expects a mixed performance from the tech giant.

Barclays analysts maintained an ‘Underweight’ rating and $184 price target for Apple stock, suggesting nearly 25% downside from current levels.

The stock had a strong run in 2024, rallying 31% in 2024 versus S&P 500’s 23% gain. It hit an all-time high of $260.10 on Dec. 24.

Commenting on the 2024 stock move, the analysts said much of the performance was driven by multiple expansion despite a weaker-than-expected iPhone and increased regulatory risks. 

Apple’s App Store business has been under pressure from regulators and developers in recent years. Last year, the company was forced to revamp its operations to conform with new European Union (EU) laws. It also changed its commission structure in the EU and opened up its devices to third-party marketplaces.

The company is also in the crosshairs of a U.S. Department of Justice (DOJ) probe for monopolizing the smartphone market.

Barclays said it expects Apple to start 2025 with a “mixed, at best” earnings release for the all-important December quarter, which encompasses the key holiday selling season. 

On average, analysts expect Apple to report first-quarter earnings per share of $2.35, up from $2.18 a year ago, and revenue of $124.77 billion versus $119.58 reported last year.

Barclays models some recovery in iPhone sales as the installed base ages but the firm calls for choppiness through 2025.

The firm said it looks forward to getting more clarity on the Google traffic acquisition cost TAC), which Alphabet pays to Apple for keeping its search as the default search engine on all iOS devices. U.S. regulators have raised red flag over this relationship as they question Google’s search monopoly.

AAPL sentiment and message volume January 9, 2025, as of 10:59 pm ET | Source: Stocktwits

On Stocktwits, retail sentiment toward Apple stock reversed to ‘bearish’ (44/100) from ‘bullish’ a day ago, with message volume shrinking to ‘low.’

An Apple watcher on the platform flagged the possibility of the stock pulling back to the $217-$229 area before buying kicks in.

The stock settled Wednesday’s session down 0.20% at $242.70. It has lost over 3% since the start of the new year.

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