Apple is scheduled to release its latest quarterly results after the close of trading on Wall Street this Wednesday. Bank of America (BofA) has provided a preview, indicating expectations for Apple to meet fiscal third-quarter results and potentially offer guidance that is ‘in-line to slight beat’ for the upcoming fourth quarter. Apple designs, develops, and sells consumer electronics, computer software, and online services. Its products include the iPhone, iPad, Mac, and Apple Watch.
Despite these expectations, Bank of America noted that sentiment surrounding Apple is currently ‘negative’. This is attributed to several challenges, including the impact of tariffs, potential future payments related to Google search, hurdles related to the App Store, and the perceived slow progress in artificial intelligence initiatives.
BofA anticipates that gross margins for Apple will bottom out in the final three months of the fiscal year. The bank’s analysis incorporates a 20 per cent tariff on iPhones, iPads, and Macs imported from China, primarily impacting product gross margins. This impact is modeled to reduce margins by 50 basis points in the fourth quarter of 2025, leading to an estimated overall decline of 110 basis points quarter-over-quarter, bringing Apple’s gross margin down to 45 per cent in fiscal Q4 2025.
Despite these challenges, Bank of America maintains a ‘buy’ rating on Apple stock with an unchanged price target of $US235. As of 1.40 pm in New York, Apple shares were trading near $US214. The stock has rallied by 4 per cent over the past month, reducing its year-to-date loss to 12 per cent.
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