Apple Inc. stock forecast: tensions between the US and China weigh on the company’s shares

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.

About Apple Inc.

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.

Apple Inc.’s main revenue streams

In 2025, the company’s revenue came from the following streams:

• iPhone: the primary source of income, generating about half of the company’s total revenue due to its popular smartphone models
• iPad and Mac: earnings from tablet and computer sales for both personal and business use. Although their share of total revenue has declined, they remain a vital part of Apple’s business model
• Wearables, home goods, and accessories: revenue from sales of Apple Watch, AirPods, and other accessories, including MagSafe and apps for iPhone, Mac, and iPad
• Services: a rapidly expanding area that includes subscriptions to Apple Music, Apple TV+, iCloud, App Store, and other services. Services have become one of the company’s most profitable revenue streams
• Financial services: Apple is constantly improving its financial products, such as the Apple Pay payment system and the Apple Card credit cards, and actively expanded its offerings in this area in 2024
• Products for businesses and corporate services: Apple offers a range of devices and services tailored for corporate clients, including businesses, educational institutions, and healthcare organisations

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 Inc.’s strengths and weaknesses

Apple has several significant advantages over its competitors that help it remain one of the world’s most successful and profitable companies:

• Strong brand and customer loyalty: Apple boasts one of the world’s most recognisable and valuable brands. User loyalty to Apple products is exceptionally high, with customers often staying with the brand for years, regularly upgrading their devices and increasing their overall expenditure on Apple products and services
• Unique product ecosystem: Apple has built an integrated ecosystem in which devices (iPhone, iPad, Mac, Apple Watch, and others) and services (iCloud, Apple Music, Apple TV+, and the App Store) work together seamlessly. This user-friendly system fosters loyalty and makes switching to competitors less appealing
• Control over hardware and software: the company rigorously analyses the performance of the products it launches, enabling it to design optimised and high-performing devices. This approach ensures high quality, security, and stability – advantages that are difficult for competitors relying on external suppliers and outsourced operating systems to replicate
• Innovation and design: Apple is renowned for its distinctive design philosophy and focus on user preferences. The company continuously invests in research and development to introduce exclusive features and deliver compelling designs
• High-margin products and services: Apple maintains stable profitability due to its premium pricing strategy and high-margin offerings. This approach allows the company to preserve financial stability while investing in future innovations, marketing efforts, and stock buybacks
• Focus on confidentiality and security: Apple pays special attention to protecting its customers’ personal data and keeping it private. The company has implemented advanced security measures in iOS and its other products, ensuring biometric safeguards for sensitive information while restricting data-sharing with external parties
• Diversified revenue streams: besides selling electronic devices, Apple actively develops services and financial products (Apple Pay, Apple Card). These ventures ensure a steady income stream even during potential declines in gadget sales

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.

• Reliance on closed-loop systems: the Apple ecosystem (App Store, iCloud, iMessage, and other services) operates on a closed-loop model, significantly limiting opportunities for its users. Competitors offering more open ecosystems (e.g. Android devices with a broader application selection) attract users who value feature diversity and freedom of choice. Antitrust authorities have also criticised Apple’s closed system for stifling competition
• High App Store commissions: the substantial fees imposed on App Store product developers have caused negative reactions from major players, including Epic Games (the developer of Fortnite), which accused Apple of excessive monopolisation. Many developers seek ways to bypass the App Store, potentially impacting Apple’s revenue. In addition, antitrust authorities are demanding changes to the App Store’s policies, which could reduce commissions and limit Apple’s control over its ecosystem
• Antitrust investigations: Apple is subject to numerous antitrust cases in the US, EU, and other regions regarding alleged monopolistic practices, particularly concerning the App Store and Apple Pay. If required to make significant changes to its business model, Apple may face reduced profitability and diminished control over its ecosystem
• Reliance on iPhone sales: Apple derives a considerable share of its revenue from iPhone sales. Despite attempts to diversify (through Apple Watch, AirPods, and services), reliance on the iPhone remains high. Competitors like Samsung Electronics Co Ltd and Xiaomi Corp offer alternative devices with innovative cameras, screens, and designs, posing a serious threat to iPhone sales. If interest in the iPhone declines, this would greatly impact Apple’s revenue
• Intensifying competition in the services and subscriptions segment: Apple is rapidly expanding its services and subscriptions segment (Apple Music, Apple TV+, iCloud, and Apple Arcade). However, it faces prominent rivals in this area, such as Netflix Inc. (NASDAQ: NFLX), Spotify Technology S.A. (NYSE: SPOT), Walt Disney Co. (NYSE: DIS) and others. These competitors offer more affordable and open solutions, which could lead to an outflow of users from Apple’s ecosystem if they are not bound to its devices

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.

Apple Inc.’s Q4 2024 report

For Q4 of the 2024 fiscal year, Apple reported strong financial results. Below are the key figures from the report:

• Revenue: 94.93 billion USD (+6%)
• Net income: 14.73 billion USD (-36%)
• Earnings per share: 0.97 USD (-34%)
• Operating profit: 29.59 billion USD (+9%)

Revenue by segment:

• iPhone: 46.22 billion USD (+5%)
• Mac: 7.74 billion USD (+2%)
• iPad: 6.95 billion USD (+8%)
• Wearables, Home, and Accessories: 9.04 billion USD (-3%)
• Services: 24.97 billion USD (+12%)

Revenue by region:

• Americas: 41.66 billion USD (+4%)
• Europe: 24.92 billion USD (+11%)
• Greater China: 15.03 billion USD (-1%)
• Japan: 5.92 billion USD (+8%)
• Rest of Asia Pacific: 7.38 billion USD (+16%)

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.

Apple Inc.’s Q1 2025 report

On 30 January 2025, Apple released its Q1 2025 earnings report. The key report data is outlined below:

• Revenue: 124.30 billion USD (+4%)
• Net income: 36.33 billion USD (+7%)
• Earnings per share: 2.40 USD (+10%)
• Operating profit: 42.83 billion USD (+6%)

Revenue by segment:

• iPhone: 69.13 billion USD (-1%)
• Mac: 8.99 billion USD (+15%)
• iPad: 8.09 billion USD (+15%)
• Wearables, Home, and Accessories: 11.75 billion USD (-2%)
• Services: 26.34 billion USD (+14%)

Revenue by region:

• Americas: 52.44 billion USD (+4%)
• Europe: 33.86 billion USD (+11%)
• Greater China: 18.51 billion USD (-11%)
• Japan: 8.98 billion USD (+15%)
• Rest of Asia Pacific: 10.29 billion USD (+1%)

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.

Expert forecasts for Apple Inc. shares in 2025

• Barchart: out of 37 analysts, 17 rated the stock as a Strong Buy, five as a Moderate Buy, 11 as Hold, one as Sell, and three as Strong Sell rating. The maximum projected price for growth is 325 USD, while the minimum target price is 185 USD
• MarketBeat: among 35 analysts, 22 assigned a Buy rating, nine recommended Hold, and four advised Sell. The maximum projected price for growth is 325 USD, while the minimum target price is 180 USD
• TipRanks: out of 32 experts, 18 recommended Buy, 10 suggested Hold and four advised Sell. The maximum projected price for growth is 324 USD, while the minimum target price is 188 USD
• Stock Analysis: among 33 professionals, 13 rated the stock as a Strong Buy, seven as Buy, eight as Hold, four as Sell, and one as Strong Sell. The maximum projected price for growth is 325 USD, while the minimum target price is 180 USD

Warren Buffett sells Apple Inc. shares

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.

Technical analysis and 2025 forecast for Apple Inc.’s stock

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.

Summary

Apple’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.