Apple stock is experiencing a rise in anticipation of the company’s upcoming earnings report later this week. However, the Wall Street analysts remain cautious despite an intriguing virtual event named ‘Scary Fast’ that Apple is hosting today.
Unveiling Updates to Mac Personal Computers
The ‘Scary Fast’ event is expected to showcase updates to Apple’s Mac personal computer lineup, particularly highlighting faster processor speeds for their new devices. While investors may hope for a boost in momentum before the earnings report on Thursday, analysts are skeptical about the impact of these upgrades.
Analysts Urge Caution
According to D.A. Davidson’s Tom Forte, Apple has been striving to recover from the initial surge in demand caused by the COVID-19 pandemic. Tom Forte remains skeptical about whether faster processors alone will be sufficient to address this hurdle.
Even with concerns, Forte maintains a Neutral rating and a $180 target price on Apple stock.
Apple Shares Show Modest Increase
In premarket trading on Monday, Apple shares experienced a 0.6% increase to reach $169.20. Although the stock has seen a 29% growth year-to-date as of Friday’s close, it has declined over the past three months after almost reaching $200.
Mixed Results for Big Tech Companies
This earnings season has been a mixed bag for Big Tech companies, with Microsoft’s impressive cloud growth being the standout. When it comes to Apple’s report, market reaction is likely to focus heavily on iPhone sales, but the company is also under pressure to demonstrate its commitment to advancing artificial intelligence technology.
KeyBanc analyst Brandon Nispel points out that while Apple possesses a strong foundation of AI within its products and services, the company faces limited opportunities for additional capital investment in technology by 2024, all while needing to grow its free cash flow.
Nispel maintains a Sector Weight rating on the stock without providing a specific target price.
In conclusion, Apple’s stock performance is being met with caution as investors eagerly await the earnings report. The ‘Scary Fast’ event may offer some positive news, but experts remain skeptical about its impact. The market will closely scrutinize iPhone sales and advancements in artificial intelligence as key factors in determining Apple’s future growth.