Apple expects Q1 performance to far exceed expectations, with multiple investment banks raising target prices

According to Zhitong Finance APP, Apple Inc. (AAPL.US) became the market focus on Friday, as the company's guidance for the first fiscal quarter ending in December far exceeded Wall Street expectations. Apple expects strong growth in the quarter ending December, particularly with a resurgence in the Chinese market. However, despite the impressive guidance, Apple's stock price turned from gains to losses during Friday's early trading, erasing pre-market gains. Its suppliers, such as Skyworks Solutions (SWKS.US) and Corning Inc. (GLW.US), showed mixed performance.

Citigroup analyst Atif Malik pointed out in a research report that Apple's optimistic guidance benefits from a stronger product cycle, especially the performance of the iPhone 17 Pro. "We believe that the iPhone's installed base is the foundation of every upgrade cycle," he stated. "Apple is experiencing a record upgrade wave, with users from different demographics expressing love for the latest models, particularly the lightweight design and camera features of the iPhone Air, which have significant appeal." Malik expects that the first fiscal quarter ending in December will become the strongest quarter in the company's history, both in total sales and iPhone sales.

He added that Apple is not only seeing an acceleration in upgrade speed but also an increase in the number of upgrading users, with new users entering the Apple ecosystem. Driven by optimistic expectations, Malik reiterated a "buy" rating for Apple and raised the target price from $245 to $315.

KeyBanc Capital Markets analyst Brandon Nispel believes that Apple's financial report is "solid," and the guidance is "noteworthy," expecting double-digit growth in both iPhone and overall revenue. However, considering the recent stock price increase, he anticipates that Apple's stock price may "consolidate" in the short term. Nispel gives Apple a "neutral" rating.

Needham analyst Laura Martin, while giving Apple a "hold" rating, also stated that the strong guidance "highlights Apple's moat." However, she expressed doubts about the sustainability of demand for the iPhone 17. "We continue to take a wait-and-see approach, as Apple's current valuation is relatively expensive, and fundamental growth faces challenges with rising competitive pressures," Martin wrote in the report. "We believe that Apple's stock price may need to wait for the next round of iPhone upgrade cycles to strengthen again."

In addition to the aforementioned institutions, several investment banks, including Melius, have also raised their target prices for Apple following the earnings report, while Jefferies directly upgraded its rating