TD Cowen analyst Krish Sankar assigned a Buy rating to Apple yesterday and set a price target of $350.00. The company’s shares closed yesterday at $301.54.
Separately, Morgan Stanley analyst Eric Woodring also weighed in, maintaining an outperform (buy) rating on the stock while increasing his base price target to $360 and his bull target to $440, or 51% potential upside. He said this event "has the chance to reframe Apple as an AI winner."
NB: New average is $305. Published targets: 34. Analysts following: 41
Recording and transcript of the June 9, 2026 Asymco One Office Hours, recorded the day after Apple's WWDC 2026 keynote. Horace Dediu shares his impressions of the event and takes questions from Asymco One subscribers.
Apple has compounded net income at 26.6%, revenue at 21.5%, and share price at 27.7% for two decades, thus doubling every three years. Yet despite this, 21 of 49 analysts rate it Hold or Sell, with another 5 having no opinion. Extraordinary claims require extraordinary evidence yet assuming the Apple flywheel is about to grind to a halt is still a majority opinion. →
The App Store ecosystem facilitated $1.4 trillion in 2025. Add Apple's direct sales and the Apple Ecosystem comes to $1.8 trillion; add browsing, social, and messaging activity and the Apple Economy reaches roughly $3 trillion. Seen another way, at a $4.57 trillion market cap, Apple is valued at only 2.5 times its ecosystem and 1.5 times its economic footprint. These third-party dependencies are a measure of platform resilience and a carefully worded caution to regulators about the downside of interfering with it. →
Part 4 of the Asahi Shimbun interview turns to the spec trap. Apple maintains improvement but is selective: it ignores refresh rates beyond what the eye can see, and invests instead in features nobody asked for, like Face ID and AirPods. The phone became a machinery of vanity because the supply of cameras created demand for image editing, not the other way around. Christensen thought Apple would be disrupted by the low end. The honest answer for why it isn't is: culture, held together by extreme diligence. →
Nota Bene
Morgan Stanley reiterates $330 price target with bull-case $440 → Morgan Stanley reiterated $330 with a $440 bull case if WWDC unlocks an AI re-rating. Apple does not respond to market fads, and a multiple above 40 is almost never experienced. Disappointment after WWDC is nearly guaranteed because it has always been a software and tools show. →
Citi reiterated a Buy rating and a $315 price target → Citi reiterated its Buy and $315 target ahead of WWDC, expecting a revamped Siri to make Apple an edge AI winner. Edge AI is inevitable, but it was also inevitable two years ago. The target is already priced in, making the AI story a non-starter. →
Q4 PC shipments are expected to fall 20% year-over-year, 11.3% for the full year → IDC now sees PC shipments falling 11.3% for 2026 and 20% in Q4, with no recovery in volumes until after 2030. The MacBook Neo is the only thing keeping the broader notebook forecast from being worse. This is a multi-year opportunity for Apple that may reset PC market share dynamics permanently. →
Citi reiterated a Buy rating and a $315 price target on the stock in a research note. The nod of approval comes ahead of Apple’s week-long Worldwide Developers Conference, which begins June 8.
Analysts believe the headline at next week’s conference will be Apple’s long-overdue revamp of its digital assistant, Siri. Citi expects a new Siri app to resemble something like OpenAI’s ChatGPT chatbot while also serving as an AI assistant across applications on Apple’s operating systems.
“Siri will handle multi-step requests, understand personal data, analyze on-screen content, generate emails or messages using both web and device context, and surface rich card-based results for everything from news to calendar data, while also completing actions across apps and shortcuts,” predicted Citi analyst Atif Malik.
Apple will pair that overhaul with deeper AI integration across its Mac, iPad, and iPhone operating systems, Citi said. Examples could include more AI features in writing, search, and photo editing.
“Edge AI has not yet taken off, but its long-term potential is substantial as consumers and enterprises increasingly prioritize low-latency, privacy-preserving, and cost-efficient AI experiences over cloud dependence,” Malik wrote. “We believe a meaningfully upgraded Siri will be a key to unlock the potential.”
Strong demand for the Mac Mini, which can run AI agents like OpenClaw, shows how edge AI is already spurring more hardware sales. Extend that demand across phones and tablets, and Apple could be an edge AI winner.
Morgan Stanley analyst Erik Woodring believes Apple’s upcoming Worldwide Developers Conference could begin to change that perception. The 5-star analyst reiterated his Overweight rating and $330 price target, arguing that a successful AI strategy could unlock a higher valuation for Apple stock, with a bull-case scenario reaching as high as $440 per share.
He noted that Apple’s recent strength has been driven by its products and services business rather than AI. However, companies viewed as “AI winners” have often earned higher valuations over the past two years, and Woodring believes Apple could soon be seen as one of them.
Why WWDC Could Be a Turning Point for Apple
Woodring believes Apple now has more of the tools needed to compete in AI. He pointed to Google’s Gemini models supporting Apple Foundation Models, Apple’s strong focus on privacy, and what appears to be a renewed push around Siri and Apple Intelligence. Unlike many of its rivals, Apple is not spending heavily on building AI infrastructure. Instead, the company can use its massive base of iPhone, iPad, and Mac users to bring new AI features to consumers. That approach could help Apple grow its AI offerings without the huge costs faced by some competitors.
The analyst also sees an opportunity for Apple to help ease some of the industry’s AI capacity constraints. A more capable Siri and improved Apple Intelligence platform could bring AI tools to millions of users through Apple’s existing ecosystem.
For investors, the bigger story may be valuation. Woodring believes that if WWDC shows a clear path for Apple’s AI plans, the stock could earn a higher multiple. In that scenario, he sees shares reaching $365 to $385, with a bull-case valuation of as much as $440.
AI-driven memory shortage continues to hammer sales; Android sales to drop 20%
According to analysis firm IDC, smartphone shipments are headed for a 13.9% decline in 2026, a downward revision from the 12.9% decline IDC had anticipated for the year in February. It would also mark the steepest drop in smartphone history, the company said.
“these pressures are compelling vendors to reduce shipments, raise prices and concentrate on higher price tiers — elevating smartphone [average selling price] to a record $550, up $100 from last year,” IDC senior research director Nabila Popal said in a statement.
“2026 will be a defining year for the industry as [a] new reality of structurally higher costs take hold,” she added. “For consumers, it means the era of ultra-cheap smartphones is over. For vendors, it means only those that can adapt their strategies to this new cost environment and sustain demand at elevated price points will survive.
The broader Android smartphone market is set to take the biggest hit, with IDC projecting a 20% year-over-year drop in shipments. Despite that, Samsung is expected to increase its market share in the space at the expense of smaller smartphone companies thanks to its midrange and premium device lineups.
Apple, the research firm said, is also expected to perform relatively well, with shipments forecast to fall 5.2% on the year, an improvement from a previously anticipated decline of 8.1%.
In its most recent earnings report, Apple announced iPhone revenue growth of 20% for the second consecutive quarter, thanks to its strong iPhone 17 lineup and improved sales out of China.
But CEO Tim Cook also warned of supply constraints due to both the memory shortage and the dearth of iPhone processors.
NB: I would add that Apple also announced that revenues for June quarter would increase at the same rate as they did for March quarter, thus for at least half the year the company will achieve 20% growth in iPhone sales. This is in sharp contrast to both what IDC and Omdia have been reporting.
The company “may be on the brink of some real AI sizzle.”
Reitzes said people are becoming more comfortable using voice commands, and Apple could benefit from this shift as technology becomes more voice-driven.
Reitzes also said the upgraded Siri could become a standalone tool that many Apple users rely on, even instead of apps like OpenAI’s ChatGPT. He described it as an “agent-style interface” that could make the Apple ecosystem more unique and spark fresh excitement among developers.
Additionally, he highlighted that no other consumer tech company has both parts of that system under one trusted setup. He added that this advantage will become even clearer—and more valuable—as AI systems get more complex and start acting more independently.
Overall, he expects Apple to post about $613 billion in revenue by fiscal 2028.
NB: Latest analyst targets are shown with Melius' stepping up. Analysts are coming round.
This upgrade follows Bank of America boosting its price target to $380 a share.
“In an agentic world, value accrues to the platform that controls user intent, personal context, app access, permissions, identity, authentication, payments, and trust,” said BofA’s senior equity research analyst Wamsi Mohan.
“Smartphone is the scaled consumer device where these factors already converge,” he added. “If AI assistants become the new front door…we think Apple should have meaningful leverage over model providers, app developers, merchants, advertisers, and payment networks.”
An agentic version of Siri could boost 2030 revenue by as much as $65 billion, Wamsi and his team estimated, adding up to $2 billion in incremental earnings over the next four years.
Reitzes sees the new Apple Siri as a stand-alone app that has the potential to replace ChatGPT for Apple's 2.5 billion installed devices, while proving to be “an agentic interface that can further differentiate the Apple ecosystem and ignite a level of excitement with developers not seen since the early days of the App store.”
But it’s also likely to establish Apple as the leader in consumer-use AI.
“If agentic AI shifts the market from answering questions to taking actions, the critical control point becomes centered around owning the endpoint,” Wamsi said. “Apple does not need to own the best frontier model if it owns the trusted interface that routes intent across local models, Apple-controlled cloud models, external models, and app actions.”
Reitzes at Melius sees that shift, which he describes as a “shot in the arm” for Apple’s app store, driving “a massive new product cycle that keeps iPhone growth going.”
He’s also observing that Apple’s architecture, with on-device models handling lighter workloads and its private cloud taking on the larger ones, makes it unique.
“No other consumer technology company has both legs of that architecture under a single trust model, and we think that gap becomes more visible, and more valuable, as agentic complexity scales,” he said.
“Agentic AI is a structural tailwind that will force consumers to get the latest and greatest Apple device because it will work better than other brands.”
Asymco Bulletin is a digest of all the work we have published for the week ending May 3, 2026.
Editor's Note: Starting next week, we will be sending Asymco Bulletin to Asymco One subscribers only. You will still receive Updates when new posts are published per your notification settings.
In Asymco One's May 1, 2026 Office Hours session, review of Apple's Q2 2026 earnings, segment growth: iPhone at 22%, Services at 16%, iPad at 8%, Mac at 5.7%, and wearables at 5%. Steady, foundational growth of Services, Gross margins reached nearly 50%, R&D spending surged, a shift in Apple's capital return strategy showing perhaps the hand of John Ternus. Guidance suggests 16% revenue growth, 22% EPS growth. Analyst sentiment turned positive post-earnings, with most price targets rising above $310. Apple's evolving identity as an engineering-centric company was the focus of many questions. →
Revenue and EPS consensus, year-ago results and my expectations Yahoo Finance Yahoo Finance’s revenue estimate for Apple in Q2 stems from 31 analysts. As of April 25, the average estimate is $109.69 billion, with a low of $107.08 billion and a high of $115.37 billion. For the earnings per share estimate, 32 analysts put it at an average of $1.95. The low is $1.56 and the high is $2.16. TipRanks TipRanks also does its own analyst polling on Apple’s quarter. In its forecast as of April 19, its consensus is for a revenue of $109.45 billion, with a high of →
TD Cowen: 15% revenue growth, 10% growth guidance → Apple is projected to gain market share in both smartphones and PCs, driven by strong iPhone 17 demand and the new MacBook Neo, with anticipated revenue growth of over 15% in Q3 and positive sentiment ahead of earnings.
Morgan Stanley forecasts fiscal second-quarter EPS of $1.74→ Despite memory pricing pressures, Apple's strong iPhone sales, potential AI and foldable iPhone announcements, solid free cash flow, and favorable market conditions position it for better-than-expected earnings and a possible stock rise to $300 by September.
Is Apple borrowing Samsung’s Market Expansion Strategy?→ Bernstein SocGen maintains optimism on Apple's strategic pricing and ecosystem strength, forecasting EPS growth and potential market share gains, while Samsung faces smartphone profit challenges but thrives in memory.
Separately, it’s been reported that Samsung might see its first operation loss from its phone division, resulting in Apple capturing 100% (or more) of global smartphone profits. Simultaneously, Samsung is seeing huge profit gains from memory, even overtaking Nvidia’s profitability. This is remarkable…
Apple share of the smartphone SoC market grew from 15% to 19% in Q1 → In Q1 2026, global smartphone SoC shipments fell 8%, but Apple thrived in the premium market by leveraging its efficient supply chain and passing costs to consumers, boosting its market share from 15% to 19%.
Google to sell TPU chips as Gemini shows returns → Why pour cash into Nvidia when you can craft your own cutting-edge chips like Google, and then turn that innovation into a lucrative side hustle by selling them to tech giants like Meta and Anthropic?
The Vision Products Group Expanding → Gurman's 2025 dissolution claim clashes with 2026's active Vision Products Group hiring spree. The Vision Products Group posted 14 new senior roles last week.
A transcript of the May 1, 2026 Asymco One Office Hours, recorded one day after Apple's Fiscal Q2 2026 earnings call. Horace Dediu presents his analysis of the quarter and takes questions from Asymco One subscribers. Hosted by Horace Dediu and Farshad Nayeri.
Horace Dediu: So I'll do a short presentation, and then we're going to open it up for questions. We are speaking approximately one day after Fiscal Second Quarter 2026 earnings call. Let's dig into it and see if we can understand it even better.
First, I think that there was a comfortable beat from already a highly elevated expectation.
So we had a range of estimates— I collected those from Yahoo and TipRanks, each one had about 30 [analysts], probably a lot of overlap between them. So we had a range of about 105 to 115 in terms of revenues in billion, and then we had EPS in a range of about 1.6 to about 2.15.
And not only did it beat the consensus, but also you can see what happened a year earlier, which is the circle at the bottom of the graph. So the beat was from already a pretty high growth rate expected from the year before.
So we have a measure of how each of us, myself included, performed relative to the actual results.
I was about 1.8% under revenues delivered, and 1.6% on EPS. And then you can see red is Yahoo and blue is TipRanks.
So speaking for myself, I was perhaps a little bit too conservative on my revenues, and I was a little bit more accurate, relatively speaking, on EPS. Roughly speaking, again, I think these are not big errors, 1% to 2%. Worst case, 3% on the consensus basis.
Now, on the segments, these are the actual growth that we ended up with, iPhone almost 22%, 16% on services, 8% on the iPad, which is impressive. 5.7 on the Mac, we'll talk about that a little bit, and 5% on wearables and growth.
Segment level, again, the worst case, you're looking at an 8% overestimation on the Mac. The Mac— I think a lot of people, once they saw the Neo come out, once they heard about the Mac mini stockouts, when they heard about the Claude bots, you know, everybody buying up all these Macs, there was an expectation of a big boom in the Mac, but those all happened fairly late in the quarter. My expectation was a little bit over, but not as much. I was off about 3% on that estimate. So although we saw 5.7% growth, some people expected double digits. Also, the pros had the same fault there.
Overall, though, I think these are pretty impressive. I didn't break out the geographic segments. China grew extremely well. Rest of the world, that grew very well. Management also pointed out that they're doing very well in developing markets. So overall, regionally, there were some extraordinary performances. But as we see here, just the iPhone was incredible, 22%. Very similar to performance in the previous holiday quarter, where, again, unprecedented growth, or at least in the near history of the product.
And we'll get into some reasoning why that is. People talk about super cycles, people talk about the assumption that we have these giant surges once in a while. Well, here's how to look at it.
There are two graphs here. The bottom graph shows in green the net sales, but trailing 12 months, so it's smoothed out, so we don't see the spikes on the holidays. That's the green line. Above that, we have the EPS line. Now you'll see how they tracked very similarly for a while, and then they began to diverge. That occurred around COVID. It also occurred during the surge in services, especially subscriptions and services. But still, there's a similar pulse, if you will, a cyclicality to it.
I mean, part of that has to do with the introduction of a new form factor. This has been true all the way back since 2012. When a new iPhone comes, especially a new, distinctive-looking iPhone, people will go out, especially in China, buy it for showing off that they have the latest, which there's nothing wrong with that. But then the second year usually is not the same, the phone is not new, it's the same form factor. That has to do a lot with tooling. That's a long, old story, that the tooling is depreciated on a two-year schedule, so you're going to produce roughly the same look a couple of years in a row, and then by the next cycle, you'll see people upgrading or replacing their older phones. So you're going to have this— I guess what they used to call a super cycle.
And you see it also in the upper graph, where I try to separate out of sales just the phones. Now this is an estimate because we have no unit sales for the phones since 2018, so some of that is an estimate. But you'll see again, once you smooth out the cyclicality, you'll see these surges once in a while. Now, again, this is a valid observation, but I don't think it's the main driver. The oscillation isn't huge, it might be significant, but it's a blend of many things.
The bottom graph is particularly interesting. The gray areas are when the stock price fell. And the red line represents the derivative of EPS. And you'll see how, when that is about to dip, there's usually a stock price sale going on. I wouldn't say it's predictive, but it's an interesting pattern to go through.
So what's happening now? You'll see from the iPhone, there's a new surge happening. Now, when Tim has been asked this question, he says that, well, the iPhone 17's really nice, people really love it, and that's a good answer, but the fact is, it's a distinctive-looking product. Some say it's the orange color, but it's certainly attractive. So we're seeing this pattern, a nice surge.
We'll get into the guidance in a minute, and that actually demonstrates that we're in some kind of an acceleration. But here's the thing, underneath all that, services is just absolutely steady growth, compound growth, and as a result, it just lifts the whole story.
Here, services is at the bottom. Normally, in a graph like this, you want to put the oldest products at the bottom and the newer ones at the top, but I wanted to highlight the fact that services is foundational, in the sense of showing how it holds up everything else.
Most people put it the other way, they say the iPhone holds everything up, but services is looking more and more to be the thing that keeps people in the ecosystem. There's a lot of value there. There's a lot of things people depend on there, and I think it's one of the reasons people don't switch. So it's another one of these stories that people aren't appreciating enough. It's been years and years of pounding the table on services, but here you see it, just how important it is. It's the tide that lifts all the boats, and the boats being all the products.
So let's now talk a little bit about margins. Unbelievable, unbelievable margins. We just hit almost 50% on gross margins. Gross margin here is the blue line. And that's composed of two subcategories. We have services in red at the top, and we have products with the purple triangles.
And although products margins are exceptional— they're right around 40%— those services, again, are pulling the whole average up, and you can see that bend in the curve in the blue line, where we were very steady around 40%, but as services took more and more; it just pulled the whole curve up.
And we also see here operating and net margins, which also are going up, naturally. There is a little bit more operating expense. We'll get into that, which maybe decreases the slope of the bottom line. But this gross margin is absolutely incredible. We just haven't seen anything like this since 2010-11. We saw that surge back then, and then it sort of leveled out, and everybody was happy with 40%, and now we're flirting with 50. I just cannot believe it.
Just one more thing. I remember being an analyst decades ago, when I was looking at different companies in hardware and software, in phones and computers and so on, and everybody was really impressed by Microsoft, because Microsoft, had an 80% gross margin, because there was very little cost of sales. That's exceptional. An 80% margin business is a money printing machine. And everybody was impressed and jealous of Microsoft that they could pull that off. Of course, Microsoft, a software company, is going to have extraordinary margins, right?
And so for a phonemaker like Nokia, there was something to be jealous of. And here we are with Apple services, a significant component on the business, approaching also almost 80% right now. And it's still rising. I just can't get over how impressive this is.
R&D Acceleration
A little bit about the difference between gross and net— you have to take out the operational expenses, and this is what we have here. It's interesting what's happened. Obviously, you see R&D overtaking on the absolute basis. So R&D overtook SG&A already in 2021. And now it's just [going] almost vertical.
By reading a little bit the guidance, I think it's going to taper a bit into the next quarter. But what we see is a significant R&D increase, also as a percent of sales, which you're seeing below in the graph below, but in a stacked fashion. In that sense, the two of them together are now approaching— haven't yet reached— a percentage of sales that was in evidence around 2007 and 8, when the iPhone was just emerging. But you'll see back then, R&D was tiny, SG&A was huge as a percent of sales. So much so that R&D—this is during Steve Jobs era, R&D was like 2% of sales. And now it's approaching 8%, which is extraordinary. Because that's an engineering company that's doing breakthrough work.
And that's something that Apple's not recognized for doing. There's a negative side of spending a lot on R&D. The positive, though, is that Apple is doing a lot of fundamental research now. This isn't fixing products, this isn't updating OS. This is engineering that is really driving what might be considered breakthrough. And that's something— and I've said this to the media when interviewed about Ternus and the succession— I said, the new CEO will need to be— this is before he was announced— I said [the CEO] would need to be someone who is acceptable to engineering, because Apple is an engineering company today. Fundamentally, culturally, operationally, it's an engineering company, and it is being now led by an engineer.
Steve Jobs was not an engineer. And none of the other CEOs were engineers. Tim Cook was an operations manager. He was excellent in a fundamental part of the business. And that is acceptable to engineers, culturally speaking. But the thing is that John is an engineer's engineer. He understands the culture of engineering and will understand how to motivate and retain talent, as well as to allocate capital effectively, not wasting it on pipe dreams. Engineers have a tendency to try to chase dreams, by the way, so you got to be harsh sometimes to shut things down. So, keep an eye on the R&D— it's a great story.
However overdoing it can be a problem. There are downsides to an engineering-led company where, again, it turns into kind of an engineering welfare state. Engineers tend to get projects and do a lot of navel-gazing, which needs to be managed carefully.
Now, let's just touch on ACTIVE. Active is the number of users, the fundamental measure of the value of the company. It's not counting iPhones. It's counting users, and these are the comments from management, just so we capture them. They come every quarter. Sometimes some products are mentioned, sometimes they're not.
So here's what we have exactly on the topic. Record upgraders and customers new to the Mac. They mentioned that Mac lifespans have been long, which is good and bad. They talk about the iPad, half the customers being— over half— new to the product. Same with the Apple Watch, this has been going on for a while.
So this is going to be important when we measure installed base, because if we see every quarter an estimate for the number of watches, or Macs, or iPads, you just take half of that and allocate it to the installed base, and the other half is growth of the installed base. So there's an interesting way to measure that, and I've been applying it. We're going to keep an eye on this.
And finally, there was a mention with respect to India during an answer to the question. The citation is that the iPhone, Mac, iPad, watch, all of these have a majority of customers that are new to the product in India. As you would expect, part of the developing market story. But this drum is still getting beaten. And that's a positive. Always want to look forward to that every quarter.
So let's jump in now to what I thought was the most unexpected comment during the call. I've pasted in here exact, verbatim the comments from the CFO. I need to point out a few things here, and I've highlighted these things in bold.
One is the dividend. The dividend number is 3.8. Last quarter was 3.9, so that's not a surprise. However, open market purchases were only $11 billion. Now, that is represented in the graph by the buyback, and that is this mustard color. And you'll notice it is extremely low. The previous quarter, we were over 25 on buyback, so we're less than half that. This is an anomaly. You'll see that it does not match the rest of the graph at all.
The blue area is dividends. The reddish area is net share repurchases, or settlements. And there's a pattern to both. Dividends has been growing in a predictable fashion, very steady. Buybacks have been somewhat steady, but up and down a little bit. During the last few periods, we've seen something unprecedented.
Now, you'll see that the 11 from last quarter was offset by a much higher number the previous quarter, but on balance, we're still down. And there's also these comments that say that they are abandoning the net cash neutral position. And I'm wondering if it's already started, because this $11 billion caught me by surprise.
I've highlighted that "our repurchase activity at any time can be affected by a number of factors that we take into account." So this was essentially explaining why sometimes there's a difference in the amount of purchases, right? And then in the middle of that commentary, he says, "as you're aware, we recently announced a CEO transition." Why does that comment fit in the middle of a paragraph, talking about the general theme?
I read this as it suggests that already the CEO choice is deciding how much to allocate to capital returns. And it appears— and again, I could be wrong— but it appears that John is probably against the idea of huge returns to shareholders in capital form. So keep an eye on this. This was, I found, very, very strange and out of character in a way. Very out of character of a Tim Cook presentation. I'm not judging it, I'm just pointing out that it isn't normal.
So here's the bottom line. This is the graph representing what's happening with the entire cash position and return of capital. The debt has decreased slightly, and it has been decreasing. And that's a good thing. As interest rates go up, you don't want to hold debt. A lot of that is fixed rate, but they're not taking on more. It seems like they're paying it down.
Net cash, which is the blue dotted line, has now been increasing two quarters in a row. Now, it's increased in the past, but never for long. It's had only one tick, during the holiday period. Here, where we're seeing two ticks— holiday and the quarter after.
Now, if you'll notice here, I'm going to try to zoom in. Those red lines represent what I would say were the trajectories to get to net cash zero. So that blue line, since they announced it, they kept missing the target. You would see that, another year goes by, and there's a notch up. Overall, the trend is down, but they haven't kept that path down all the way to zero. And that is now completely abandoned.
Again, we'll have to figure out why. The buyback, as I mentioned, halved— at least more than halved— to 11. Net cash zero abandoned, $100 billion net cash reduction. You'll see that this blue dot line has gone down by about half. It was down even further than that until it came back a bit. So that is going from about $160 billion net cash to the current $62 billion, which is why we get to 100 reduction. And $1 trillion overall return, which is, again, something they mentioned. In fact, they're at $1.085 trillion. And still $100 billion will be allocated further. Whether they actually spend it is another matter, but that's been approved.
So now— is this good news or bad news? I don't think it matters. I think at the end of the day, the value of the company doesn't change because of this. The value might be captured in the share price, or it might be captured as a percentage of the company that has been increasing.
In fact, let me just pop into the next slide. What does this mean? Are we never going to reach what I call the halving? Well, we were at the maximum 26.5 billion shares. And now we've reduced that to about 14.6. Half would be 13.2. So we're still going down. But there's 1.4 billion shares to go before it's half of what the max was. Now, this is an arbitrary figure. I just thought it was an interesting target to have. And as you can see, it's getting asymptotic as the price goes up. It should be harder and harder to get there. But we have $100 billion allocated. $260 billion at the current share price would need to be spent to get to half. But probably we're not going to get there. I really don't— if I were a betting man, I would say we're probably going to see this taper.
Let's look a little bit at guidance. This is based on what management already communicated. So if you put in the numbers they gave us, you will get revenue growth of 16%, coming at about— well, they guided 14 to 17, so I'm estimating 16 conservatively right now. That gets you to $108.7 billion. If you put in the other numbers— the margin, the OI&E and the tax— and do something about this share reduction. (We're still going to probably see a share reduction.) We're going to look at EPS 1.92. Which is another 22% growth. This is what we had last quarter as well.
I'm putting gross margin at the top of the guidance. [Last quarter] they went over. They guided high, and even so they went over, so I'm going to assume they're going to still hit towards the upper end of the range. I'm exactly at the upper end of that range.
If those things are true, the iPhone almost necessarily has to grow about 19%. Now, here, I'm dialing the Mac way up to 18% growth, because I do think they're going to get a lot more Mac Neos into customers' hands. Now, that's a lower price point, but it will drive sales. So yeah, I could be a little bit high on this. If I am, then iPhone needs to go a little bit higher because I still think they're going to get the revenue there.
They did warn that iPad is facing a tough comp, so I'm putting iPad down 3%. Wearables and home, 4%. It was 5% last time, so maybe consistency there. And Services, just the same as before, 16%, could come in a little bit less. But if it does, again, it's going to be put into something else like the iPhone.
So overall revenue growth, I think 16% is very much being telegraphed. And as I always say, they already have April on their books. They're communicating exactly at the end of April. They're not going to lie to us and withhold data from April. They know about a third [of the quarter] already, so that's why this guidance is so useful.
And, as you saw with my error analysis, nowadays, people's estimates are very close. There's a lot of consistency. We're not off more than a couple percentage from each other. That's just because they're so accurate on their guidance.
And speaking of analysts, one more graph. This is just some of the latest price targets. I'm just trying to bring everything together that came out today. This is all very brand new. A lot of targets moved up. Not that it's all that important, but people are getting more and more excited. Almost all the targets from anybody who has a positive— effectively a buy rating— is now above $310 as a target. There's two who are negative, that are at 270 and below. This is Barclays and Rosenblatt. And then there's a few which have no ratings. So they're typically neutral.
But overall, all these numbers are higher than they used to be. Now, again, I don't use that very much, but it's worth keeping an eye on things just to get a sense of how the sentiment is out there. And it looks like the stock is responding positively today. Not by much— 3% or so, last I checked. But that's the story today.
So given that, this is my first take on the quarter. Love to take questions.
-- End of Presentation --
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Apple is set to report fiscal second-quarter results on April 30, and investment firm UBS is expecting a “slight” upside to the consensus, based on Mac and iPhone-related strength.
“Supply chain checks and analysis of sell-through data suggest modest upside to our iPhone estimates while demand for the Neo and Mac mini suggests demand at least in-line with our Mac rev forecast,” UBS analyst David Vogt wrote in a note to clients. Vogt reiterated his Neutral rating on Apple but raised his price target to $287 from $280.
Turning to guidance, Vogt said he is expecting a “solid” offering for the June quarter and upped his earnings estimates as a result.
“Rising memory prices and Apple's ability to secure adequate supply is driving smartphone share gains for the iPhone product line at the expense of the broader Android ecosystem in our view,” Vogt explained. “In addition, solid demand for the Mac portfolio in part driven by initial success of the lower priced 'Neo' as well as demand for the 'mini' increasingly used to run AI agents like OpenClaw should drive incremental upside relative to our expectations.”
A consensus of analysts expects Apple to earn $1.94 per share on $109.73B in revenue for the fiscal second quarter.
TD Cowen analyst Krish Sankar reiterated a Buy rating and a $325 price target on AAPL stock. He expects Apple to report over 15% year-over-year revenue growth for the March quarter and to guide June-quarter revenue up about 10% year-over-year, driven by healthy iPhone 17 demand and the new MacBook Neo.
Key watch items: Apple’s ability to manage memory cost inflation and the launch of a compelling AI‑powered Siri. Sankar believes Apple will continue gaining share in both smartphones and PCs, with sentiment already positive heading into earnings.
Apple is set to report earnings on April 30. Currently, analysts expect AAPL to post revenue of $109.45 billion in fiscal Q2, up from $95.36 billion in the year-ago quarter. Further, the company is expected to report earnings of $1.95 per share, compared with earnings of $1.65 in the prior-year quarter.
