Apple (NASDAQ:AAPL) is a “Magnificent Seven” member, but this doesn’t mean everybody likes the company all the time. Indeed, some investors and analysts have a pessimistic AAPL stock outlook, but don’t worry. The bull case remains intact and Apple may redeem itself in the current quarter.
Usually, Apple is a darling of the financial markets. So, it’s unusual to see this iconic company being criticized on Wall Street. However, I encourage investors to just be patient. A deep dive will surely reveal that Apple’s issues aren’t fatal to the company or its shareholders.
Oh, No! AAPL Stock Is Stuck in a Rut!
It’s undoubtedly frustrating to see Apple stock having trouble clearing the stubborn $200 resistance level. After a powerful share-price rally in 2023’s first half, though, Apple’s investors need to give the market time to digest those gains.
Besides, even a market leader like Apple can’t be a market darling every quarter. Analysts tend to take turns criticizing companies before they decide to favor them again. Currently, they’re criticizing Tesla (NASDAQ:TSLA) and, to a lesser degree, Apple.
Apple’s first-quarter fiscal 2024 results and guidance gave analysts a perfect excuse to criticize the company. First of all, Apple’s quarterly revenue only grew 2% year over year, which isn’t the “Magnificent Seven” result Wall Street had hoped for.
Second, Apple’s current Achilles’ heel is the company’s sales in China, which slumped 13% YOY to $20.8 billion. Analysts and investors also didn’t seem to like Apple’s current-quarter guidance.
Per Barron’s, Apple’s outlook for the current quarter indicates iPhone revenue of $46.3 billion and total revenue of $89.8 billion. These figures fall short of Wall Street’s call for iPhone revenue of $49.7 billion and total quarterly revenue of $95.6 billion.
The ‘Storm Will Pass’ for Apple
Not everyone is in the bearish camp, however. For example, Deepwater Asset Management co-founder and managing partner Gene Munster assured, “I still think China’s a big opportunity for Apple.” Munster also predicted, “I think this storm will pass.”
I tend to concur. In addition, I would claim it will be easier for Apple’s storm to pass now that the bar has been set low for the company. After all, pessimism can often lead to positive surprises.
CFRA analyst Angelo Zino also appears to be in the “storm will pass” camp, as well as the “glass half full” camp. Zino contended, “Although China’s softness implies share loss, growth across the rest of Asia, installed base rise, and sustained +10% Services growth are good health indicators.”
In a similarly optimistic vein, Raymond James analyst Srini Pajjuri cited Apple’s “unparalleled ecosystem, double-digit Services growth, and solid margin execution.”
To all of that, I would add that Apple’s 16% YOY first-quarter fiscal 2024 EPS growth represents a decent performance. Perhaps, then, the storm doesn’t need to pass if the weather really isn’t that bad in the first place.
AAPL Stock Outlook: $200 Soon, $250 in Due Time
All things considered, the AAPL stock outlook calls for a near-term break above $200. This, ultimately, will be a stepping stone on the way to $250 before the year is finished. Then, the frustrating $200 resistance level will be just a faded memory.
It’s hard to see this clearly now, especially if you’re letting some investors’ and analysts’ pessimism cloud your judgment. Apple stock has recovered from much worse circumstances than what’s happening now. So, just hang in there, hold your shares and don’t obsess over the seemingly stormy weather.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
