Apple's Services Drive Gains Amid iPhone Sales Challenges

Apple continues to push its Services portfolio as a growth driver with Apple TV+ gaining momentum from 'Severance.' However, iPhone sales face headwinds. Investors should consider the mixed signals from Apple's performance.

Date: 22-03-2025

AI Rating: 6

Earnings Per Share (EPS): The Zacks Consensus Estimate for Apple’s fiscal 2025 earnings has declined slightly to $7.26 per share, still indicating a growth of 7.56% from fiscal 2024. This moderate growth can be seen as a positive signal for investors.

Revenue Growth: Apple’s Services revenues grew by 14% year over year in the fiscal first quarter, with expectations for continued growth. This indicates strong performance in its Services segment, which can positively impact stock price.

Profit Margins: Despite the profitability challenges faced by Apple TV+, which is reportedly losing over $1 billion, the overall strong liquidity and modest content spending may buffer the impact on Apple’s profitability in the long term.

It’s crucial to highlight that while the Services portfolio shows promising growth, iPhone sales have faced challenges, particularly in China, with an 11.1% decline in that region year over year.

Given the mixed nature of the news—growing revenues in Services but losses in streaming and iPhone sales—the outlook seems neutral for Apple's stock price.

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