Apple Stock Could Move Higher As Goldman Predicts Earnings Beat

Apple Inc. is anticipated to deliver a strong fiscal fourth-quarter performance, exceeding consensus estimates for both earnings per share (EPS) and revenue, driven primarily by robust iPhone sales and sustained demand for Mac computers. This positive forecast comes from Goldman Sachs analyst Michael Ng, who maintains a Buy rating on the stock with a price target of $279.

The anticipated earnings beat is largely attributed to the enduring popularity of the iPhone 16, which has demonstrated stable year-over-year demand, alleviating earlier concerns about potential production adjustments. Goldman Sachs projects Apple's Q4 EPS to reach $1.61, surpassing the consensus estimate of $1.57, and revenue to hit $94.5 billion, exceeding the expected $93.6 billion. The company's ability to navigate supply chain dynamics and maintain consumer interest in its flagship product is seen as a key factor in this expected outperformance.

Beyond the immediate quarter, Goldman Sachs anticipates continued strength in iPhone demand through fiscal year 2026. This sustained momentum is expected to be fueled by both competitive pressures among U.S. carriers and the anticipated introduction of new form factors, notably the potential launch of a foldable iPhone 18.

Furthermore, the upcoming iPhone 17 series is expected to contribute significantly to revenue growth, with projections indicating a 5% increase in fiscal 2025 and a 7% rise in fiscal 2026. These future iPhone models are expected to feature enhancements such as thinner and lighter designs, larger screens for base models, and the incorporation of advanced A19 chips with increased RAM to support enhanced AI functionalities.

The integration of artificial intelligence (AI) into Apple's product ecosystem is also viewed as a significant growth catalyst. The gradual rollout of Apple Intelligence features is expected to incentivize users to upgrade their devices, thereby driving incremental sales. As more exclusive AI-powered functionalities become available on newer iPhone models, user demand for upgrades is projected to increase, positively impacting Apple's revenue trajectory.

The Services segment is also expected to contribute significantly to Apple's overall financial performance, with Goldman Sachs projecting an 11% year-over-year growth, reaching $26.9 billion. This growth is anticipated to be driven by a 12% increase in App Store billings, highlighting the resilience and visibility of Apple's revenue streams, even amidst ongoing regulatory scrutiny. The strength of the Services segment underscores Apple's ability to generate recurring revenue from its installed base of devices.