Goldman Sachs is bullish on Apple ahead of earnings, expecting Q3 revenue and EPS to exceed expectations

Zhitong
2025.07.25 08:29
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Goldman Sachs released a research report on Apple, giving it a "Buy" rating with a target price of $251. It is expected that Apple's revenue for the third quarter of fiscal year 2025 will be $89.5 billion, and earnings per share will be $1.45, both exceeding market expectations. Key factors include growth in service business, strong product line performance, and improvement in gross margin. Despite facing uncertainties in trade policies and risks in advertising revenue, it is expected that Apple will enter an iPhone upgrade cycle in the next 12 months

According to the Zhitong Finance APP, Goldman Sachs has released a research report, giving Apple (AAPL.US) a "Buy" rating with a target price of $251. Apple will announce its third-quarter results for the fiscal year 2025 on July 31, Eastern Time, and Goldman Sachs expects its revenue and earnings per share to exceed market expectations.

Specifically, Goldman Sachs estimates Apple's Q3 revenue to be $89.5 billion, a year-on-year increase of 4%, better than the market expectation of $89.1 billion; it expects earnings per share to be $1.45, also better than the market expectation of $1.42.

The main factors driving Apple's revenue and earnings per share to exceed expectations include: double-digit growth in service revenue (11% year-on-year); strong performance across product lines such as iPhone, Mac, iPad, and wearables; and better-than-expected improvement in gross margin, benefiting from optimized tariff-related costs and reduced foreign exchange headwinds.

Goldman Sachs stated that the revenue growth of Apple's service business will remain resilient, mainly due to the continued acceleration of App Store consumption growth, despite the increased uncertainty on the platform from opening third-party payment channels. In the next 12 months, the upgrade demand for iPhones will be supported by two main factors: first, U.S. wireless carriers increasing promotional efforts, and second, product innovations including Apple's smart features and design changes. However, uncertainties related to trade policies and tariffs, as well as risks to Apple's advertising revenue, remain bearish factors to watch in the short term.

Looking ahead to the fourth quarter of fiscal year 2025, Goldman Sachs expects Apple's revenue to be $99.5 billion, earnings per share to be $1.70, and a gross margin of 45.9%, all better than general market expectations. With further innovations in iPhone design and software, Apple is expected to enter an iPhone upgrade cycle in fiscal years 2025 and 2026.

As of Thursday's market close, Apple fell 0.18% to $213.76. The stock has declined 14% year-to-date

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