Apple's stock facing challenges in China, losing market share, but Services business thriving

From Nasdaq: 2025-01-13 12:40:00

Apple shares surged 29.6% in the past year after the launch of Apple Intelligence. Despite this, the company faced challenges in China, losing market share to competitors like Xiaomi. Global smartphone sales grew 4% in 2024, with Samsung leading in shipments. Apple offered discounts in China but lacks Apple Intelligence in the region.

Apple’s Services business is thriving, with over 1 billion paid subscribers. Services revenue grew 12% in Q4 2024. The addition of Apple Intelligence is expected to boost user engagement. Revenue for Q1 2025 is projected to grow in low to mid-single digits. The consensus estimate for Q2 2025 revenue is $95.96 billion.

Apple’s stock is trading at a premium, with a stretched valuation compared to the sector. Shares are below the 50-day moving average, indicating a bearish trend. Apple is focusing on its Services business’s growth, but delays in launching Apple Intelligence in key markets could impact future prospects. The stock currently has a Zacks Rank of #3 (Hold).

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Read more at Nasdaq: Will Apple’s Growing China Woes Derail the Stock’s Momentum in 2025?