Jefferies raises Apple rating to "Hold": Q3 sales expectations warm up but concerns arise over insufficient AI innovation

According to the Zhitong Finance APP, Jefferies Investment Bank recently adjusted its stock rating for Apple Inc. (AAPL.US) from "Underperform" to "Hold." This change is primarily based on the potential for unexpected growth in global iPhone sales in the third quarter of fiscal year 2025 (April to June, rather than the third calendar quarter). However, the institution also warned that the smartphone market may face weak demand pressure in the second half of the year, particularly expressing caution regarding the growth of Apple's service business revenue.

Data from Counterpoint Research shows that global iPhone shipments surged 15% year-on-year in April and May this year, marking the strongest quarterly growth since 2021. Jefferies analyst Edison Lee's team pointed out that this impressive performance is built on a 12.5% sales growth in the March quarter, with the recovery in demand from the Chinese market and promotional strategies playing a key role.

Notably, during the recently concluded "618" e-commerce promotion period, iPhone achieved approximately 19% year-on-year sales growth in the Chinese market through a combination of targeted discounts and government consumption subsidies, driving a 10% year-on-year increase in sales for the first 45 days of June. Analysts believe that this data clearly indicates that Apple is actively consolidating its position in the high-end smartphone market in China, while price-sensitive consumers still show a strong willingness to upgrade under favorable conditions.

Based on the aforementioned market performance, Jefferies has significantly raised its third-quarter iPhone shipment forecast to 49.4 million units, revising the year-on-year growth rate from the previous estimate of 1% to 9%. However, the institution holds a conservative outlook for the second half of the year, expecting a quarter-on-quarter decline of 11% in the September quarter (July to September) to 46.3 million units, reflecting a 6% year-on-year negative growth.

Supply chain research indicates that the production target for the iPhone 17 series in the second half of 2025 is roughly in line with the same period last year. However, analysts warn that if the new products lack revolutionary functional breakthroughs and artificial intelligence applications fail to deliver disruptive experience upgrades, sales of the new models may come under pressure.

The market generally expects Apple to disclose its third-quarter financial report around July 31, with current Wall Street forecasts estimating revenue of $88.67 billion and earnings per share of approximately $1.42. Although Apple's stock price rose 1% in early trading on Wednesday following the rating upgrade news, the stock has still fallen 17% year-to-date in 2025, reflecting widespread investor concerns about the sustainability of growth for the tech giant. As of the time of writing, Apple's intraday stock price hovers around $211.5. Jefferies' rating adjustment reflects the market's contradictory mindset towards the consumer electronics industry: the short-term promotional pull effect is evident, but long-term innovation momentum and demand recovery still need to be observed