Apple Inc.’s (NASDAQ: AAPL) Q1 2025 earnings report revealed record revenues, steady growth in the services segment, and stable iPhone sales. However, the company faced a slowdown in demand for its devices. Additionally, revenues in China fell due to intensifying competition from local brands and waning consumer interest, which became a key factor in investor concerns. Following the release of the quarterly earnings report, the stock price moved lower.
This article examines Apple Inc., conducts a fundamental analysis of its financial report, strengths and weaknesses, and provides a technical analysis of Apple shares, forming the basis for Apple’s stock forecast for 2025.
Apple Inc. is a US company founded in 1976 by Steve Jobs, Stephen Wozniak, and Ronald Wayne. Initially, it focused on manufacturing personal computers but later expanded its operations to become the leader in the consumer electronics industry. Apple is renowned for its innovative devices – the iPhone, iPad, Mac, Apple Watch, and AirPods – and its unique ecosystem, which integrates these products into its existing services.
Apple went public on the NASDAQ on 12 December 1980 under the AAPL ticker symbol. The company raised approximately 100 million USD, marking it as one of the largest and most successful initial public offerings of its time.
Consistent demand from investors drove up the value of Apple shares, eventually limiting the number of participants able to afford them. As a result, the company has conducted four stock splits in its history, each time lowering the share value and increasing the number of shares. In 1980, there were approximately 4.6 million shares in circulation; by 2024, this figure had exceeded 15 billion.
In addition to investor demand, Apple generates market demand for its shares through stock buybacks. This strategy enables the company to reduce the total number of outstanding shares, thereby increasing earnings per share for the remaining stock and making the securities more appealing to investors. Since 2012, when Apple introduced its share buyback program, the company has allocated approximately 700 billion USD to this initiative, making it one of the world’s leading companies in stock buyback volume, surpassing major corporations in other sectors.
The stock buyback is financed through free cash flow and low-interest loans.
In 2025, the company’s revenue came from the following streams:
Conclusion: based on the above, Apple generates revenue from manufacturing and selling hardware devices and earns from digital service subscriptions and commissions on App Store transactions.
Apple has several significant advantages over its competitors that help it remain one of the world’s most successful and profitable companies:
The above advantages enable Apple to sustain its market leadership despite intense competition from other technologically advanced companies.
Apple also faces several vulnerabilities that its competitors could exploit. These weaknesses are associated with specific aspects of its ecosystem and external factors, including antitrust investigations into the company.
These vulnerabilities pose both external and internal risks to Apple. In particular, antitrust investigations jeopardise its control over the App Store and its policies on handling competitors. Hefty fines or a shift in its business model could significantly impact its profitability and market position. In Q3 2024, Apple paid a 10.2 billion USD fine imposed by the European Union, adversely affecting its profitability. The European regulator continues to monitor the company closely, with Apple facing the threat of a new fine that could amount to 10% of its total annual revenue.
For Q4 of the 2024 fiscal year, Apple reported strong financial results. Below are the key figures from the report:
Revenue by segment:
Revenue by region:
Nearly all metrics, except for data from the Wearables, Home, and Accessories segments, demonstrated growth. However, the company’s net profit still dropped by 36%. This decline was due to a 10.2 billion USD fine imposed by the European Union. Excluding this one-off payment, the net profit growth in Q4 2024 would have been 8%.
The company provided a conservative forecast for the next quarter. Revenue is expected to grow in the low to mid-single digits year-on-year, service income is anticipated to reach double-digit figures, and gross profit is forecasted to be 46-47%, 1-2% higher than the previous quarter.
On 30 January 2025, Apple released its Q1 2025 earnings report. The key report data is outlined below:
Revenue by segment:
Revenue by region:
In its Q2 2025 forecast, Apple anticipates revenue growth in the low to mid-single digits year-on-year. With Q2 2024 revenue at 95 billion USD, this suggests a range of approximately 98 billion to 100 billion USD. Services revenue is expected to increase in the low single digits. The strengthening of the US dollar against other currencies may negatively impact revenue growth by around 2.5%.
Based on the report data, Apple delivered record financial results in Q1 2025 despite challenges in certain segments. Total revenue rose by 4% to an all-time high of 124.3 billion USD, while EPS increased by 10% to 2.40 USD, exceeding analysts’ expectations.
The iPhone segment saw a modest decline in revenue, suggesting stagnant demand or a weaker-than-expected reception for the new iPhone 16 line-up. Mac sales grew, driven by new models featuring M4 chips. The iPad segment also expanded, benefitting from model upgrades. Conversely, the Wearables, Home, and Accessories segment declined, possibly indicating market saturation or intensifying competition. Apple’s services, including the App Store, Apple Music, iCloud, and AppleCare, posted strong growth, highlighting the company’s strategic shift towards revenue diversification through subscriptions and services.
Sales in China fell sharply by 11%, reflecting difficulties in this market due to local competition and potential geopolitical factors. However, growth in other regions, including the Americas, Europe, and Asia-Pacific, helped offset some losses. Overall, Apple reaffirmed its resilience and growth potential despite various market challenges.
In 2024, the Berkshire Hathaway hedge fund, managed by Warren Buffett, began significantly reducing its stake in Apple, selling company shares. This move caught the attention of market participants, as Apple had been Berkshire’s most prominent position for several years, making up roughly half of its entire portfolio. In Q1 2024, Berkshire reduced its stake in Apple by 116 million shares; in Q2, it sold another 389 million shares. The sales continued in Q3, with an additional 100 million shares sold. As of November 2024, Berkshire Hathaway’s portfolio held only 300 million shares of Apple.
The key reasons cited by Warren Buffett relate to tax strategy. He expressed concerns about a potential increase in capital gains tax and noted that current tax rates make selling shares a favourable move to protect shareholder interests. While Buffett emphasised that he has not lost confidence in Apple, his decision to reduce the stake highlights Berkshire Hathaway’s cautious approach to the market amid economic uncertainty and rising risks.
Apple stock is trading within an ascending channel on the weekly timeframe. On 23 December 2024, the price reached the channel’s upper boundary and rebounded, signalling a potential corrective decline, which subsequently occurred. The stock price fell 10% from its 23 December high of 260 USD. Based on Apple’s stock performance, potential price movement scenarios for 2025 are outlined below.
The optimistic forecast for Apple’s stock suggests a breakout above the 237 USD resistance level, followed by a rise towards the channel’s upper boundary at 270 USD.
The pessimistic forecast for Apple’s shares anticipates a continued correction, with the price potentially breaking below the 220 USD support level and falling to 200 USD. A rebound from 200 USD would indicate the correction’s completion and a resumption of growth. In this scenario, the stock could advance towards the channel’s upper boundary at 300 USD.
AAPL stock analysis and forecast for 2025Apple’s Q1 2025 report reaffirms its status as a tech giant, highlighting strong fundamentals, record revenue, robust services segment growth, and resilient hardware sales despite challenging macroeconomic conditions.
However, Apple faces several headwinds, including slowing global smartphone demand, regulatory pressure on the App Store in China, and intensifying competition from companies specialising in AI-driven products. Additionally, its dependence on China for supply chains heightens geopolitical risks.
Apple is actively advancing AI technology but is still behind competitors such as Alphabet Inc. (NASDAQ: GOOG) and Microsoft Corporation (NASDAQ: MSFT) in generative AI, where they have made significant strides.
Nonetheless, despite these challenges, Apple Inc. benefits from a strong ecosystem, a high-margin services business, and a loyal customer base, giving it a notable competitive advantage. Despite macroeconomic and regulatory risks, its strategy – focused on expanding services, AI development, and geographic diversification – supports expectations of continued growth and a solid market position.
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.