03 May 2024
If you are covering Apple’s latest financial results, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“Apple has produced a weak set of numbers in its latest financial results, but crucially they could have been a lot worse. Its services division, which makes up around a quarter of revenue, did much of the heavy lifting, while its sales into China were better than feared. Apple, however, is slowing as a result of weaker consumer demand for tech products, as well as these products coming towards the end of their cycle.
“Apple is in somewhat of a muddle through environment right now – quite a contrast to the other big tech names. Unfortunately, the performance in China has likely not bottomed out yet, and it faces tough regulatory pressure with its iPhone, coupled with smartphones being a low growth sector.
“There are signs that things are getting slightly less bad for Apple, though. It has increased its share buyback which will help support the stock, while all eyes will turn to the potential launch of an AI smartphone in September. Historically the stock has done well leading up to significant product launches, so it will be a date to watch with interest.
“For investors, Apple is very much a wait and see story. Its valuation has come down to more palatable levels and the stock has likely been beaten up enough now. However, in the short-term there needs to be a catalyst, before we can see the shares outperform the wider market.”
