Apple shares have dropped 21% YTD due to tariffs, but Services business is thriving.

From Nasdaq: 2025-04-21 15:00:00

Apple shares have declined 21.3% YTD, underperforming the Computer & Technology sector. Tariffs imposed by Trump negatively impacted the stock. However, a 90-day pause announcement saw shares recover 3.4%. China’s market is crucial for Apple, but demand for iPhones has been sluggish. Services have been a bright spot for Apple, with revenues growing 14% YoY in the first quarter.

Apple’s Services portfolio is a strong growth driver, with over 1 billion paid subscribers. However, Apple TV+ lacks content compared to rivals, leading to losses of over $1 billion. Despite this, Apple TV+ market share in the US has increased. Apple Intelligence features have boosted iPhone sales in regions where available, showing potential for growth.

The Zacks Consensus Estimate for Apple’s fiscal 2025 earnings has declined 1.1% to $7.18 per share. Apple stock is trading at a premium with a P/E ratio of 27.85X. The stock is currently below the 50-day and 200-day moving averages. Apple’s earnings have beaten estimates in the past four quarters, with an average surprise of 4.39%.

Apple’s Services business is thriving, but Apple Intelligence’s performance is a concern for product sales. The stock is currently overvalued, trading at a premium. With a Zacks Rank #3 (Hold), waiting for a better entry point might be prudent. Apple’s near-term growth prospects may not justify its current valuation.



Read more at Nasdaq: Apple Shares Dip 21% Year to Date: Buy, Sell or Hold the Stock?