Apple reports second-quarter earnings on Thursday.
Investors will be looking for updates on Chinese iPhone demand.
The company's stock is down 12% in 2024, trailing the S&P 500.
Apple will report fiscal second-quarter earnings on Thursday after the closing bell.
Analysts are dialed in on Apple's iPhone business in China, which has faced a surge in competition over the past year, as well as its capital return plans and guidance as it prepares to release its next-generation iPhone later this year.
Apple's stock was down 12% year-to-date through Wednesday's close, trailing the the S&P 500's 5% gain.
JPMorgan expects short-term headwinds in iPhone sales will give way to AI tailwinds
Scott Olson/Getty Images
Low expectations heading into Apple's second-quarter earnings release are warranted, according to JPMorgan, but the "cyclical headwinds" could soon turn into "AI tailwinds," according to a recent note.
"The upcoming earnings print will still matter for investors in offering insights into the magnitude of the cyclical challenges on account of pressured consumer spending as well as the headwinds in relation to market share moderation in China," JPMorgan said.
The bank said investor expectations might be so low that a slight miss from Apple could spark a turnaround in the stock price as the results turn out better than feared.
JPMorgan said that based on the latest demand trends, it expects Apple to report a modest revenue miss in the quarter, as well as a "more significant" miss to revenues when it reports third-quarter revenue guidance.
JPMorgan rates Apple at "Overweight" with a $210 price target.
Apple's consensus second-quarter revenue estimate is $90.33 billion.
2nd quarter
Revenue estimate: $90.33 billion
Products revenue estimate: $66.95 billion
iPhone revenue estimate: $45.76 billion
Mac revenue estimate: $6.79 billion
iPad revenue estimate: $5.91 billion
Wearables, home and accessories estimate: $8.29 billion
Service revenue estimate: $23.28 billion
Greater China rev. estimate: $15.87 billion
EPS estimate: $1.50
Operating cash flow estimate: $22.87 billion
Total operating expenses estimate: $14.33 billion
Gross margin estimate: $42.01 billion
Cash and cash equivalents estimate: $36.83 billion
Cost of sales estimate: $48.52 billion
Total current assets estimate: $142.22 billion
Total current liabilities estimate: $116.82 billion
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