Morgan Stanley calibrates its opinion on Apple’s stock before profit, originally appeared on Thestreet.
Apple’s (S)Aapl)) The financial engine fires more than just the iPhone; From later we saw a segment with a high margin that breaks over its weight.
As he heads to his next profit report, this trend may matter much more than expected.
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In addition, if you follow the models, the quiet calibration of a company may be the Telltale sign for what is ahead of Apple stock.
Sometimes it is side businesses that steal the show.
Apple opened a fiscal 2025 with a few powerful strokes, which surprisingly attracted a muted response from Wall Street.
In December, the quarter (Q1 2025) Apple reported high sales of $ 124.3 billion, which is 4% compared to a year ago, while delivering a diluted EPS of $ 2.40, which is a 10% jump.
Then in March quarter (Q2 2025) then maintained this momentum, with $ 95.4 billion sales, which represents a 5% growth compared to the year and a record $ 1.65 EPS for the period.
The iPhone 16 was a stunning success, raising the iPhone revenue by 2% to $ 46.8 billion. Macs and iPads surprised, climbing 7% and 15% respectively.
Related: Veteran analyzer drops out a surprise call of Tesla before profit
However, the Apple services segment has again stolen the show, which has grown by 12% to $ 26.6 billion, thanks to the power of App Store, Apple Music and cloud offers. Gross margins kept close to a solid 47%, which gives Apple a healthy pillow.
However, Tim Cook does not neglect the risks.
He said potential US tariffs can shave to $ 900 million from three -month profit. In response, Apple reinforces the iPhone assembly in India and Vietnam to effectively disperse the risk of the supply chain.
He also hugs AI with open arms.
During the holidays, she unfolded Apple Intelligence, layers in generative characteristics in iOS, as more intelligent prompts for Siri and AI-edited photos.
Nevertheless, a waiting antitrust solution can force changes to the app store that significantly affect the revenue in the application.
More stock news:
This said that by assuring its investors, Apple announced the huge purchase of $ 100 billion and raised its dividend to 26 cents per share.
Nevertheless, the shares are still reduced by about 15% so far.
Before its Q3 profit report after a few days, Apple simply received a flutter from a familiar cash cow in the App Store.