Apple's earnings report shines, stock price surges, but AI layout and tariff pressures become the focal point of Wall Street's confrontation

According to Zhitong Finance APP, on Friday, Apple's (AAPL.US) stock price rose due to its strong performance in the third quarter of fiscal year 2025; however, Wall Street analysts had mixed reactions.

Citigroup maintained a "Buy" rating on Apple and raised the target price from $207.57 to $245.

The analyst team led by Atif Malik pointed out that although the June quarter received a short-term boost from pre-consumption due to tariff policies and increased promotional efforts in the Chinese market, Apple's performance outlook alleviated investors' concerns about revenue decline in the September quarter.

Analysts noted that Apple clarified that the impact of the early performance release was limited to about 1% (mainly concentrated in U.S. sales in April), and channel inventory remained at the lower end of the target range. Analysts believe that the outlook shows that device upgrades and service businesses (despite recent adjustments to App Store payment policies) continue to maintain overall growth momentum, although this judgment does not take into account the potential impact of changes in Google's (GOOGL.US) traffic acquisition costs (TAC).

The Malik team added, "Apple also revealed that it is increasing investments in the field of artificial intelligence (AI) and may enhance its AI business layout through mergers and acquisitions, which will be seen as a positive signal by the market. Overall, Apple's fundamentals remain robust, and we believe that the new generation of Siri, foldable smartphones, and Vision Pro 2 will support next year's performance."

Needham maintained a "Hold" rating, believing that Apple's third-quarter performance was strong, but capital expenditures are continuously rising, and AI-related progress has been delayed.

The analyst team led by Laura Martin pointed out that before the iPhone replacement cycle arrives, it is difficult for Apple's stock price to break through. The Apple Intelligence system integration plan mentioned in the earnings call will not be realized until next year, meaning that 2025 is not a breakout year.

The Martin team stated, "Currently, the Android camp is leading the iOS system with Gemini technology. Considering that Apple is essentially still a single-product company reliant on the iPhone, if the gap between iOS and Android continues to widen, its valuation risk will significantly increase."

Oppenheimer reiterated a "Hold" rating on Apple.

Analyst Martin Yang pointed out that Apple's third-quarter revenue/earnings per share reached $94 billion/$1.57, showing impressive performance, with revenue from Greater China growing 4% year-on-year, reversing the downward trend of the previous two quarters. At the same time, Yang believes that Apple has successfully resolved complex tariff challenges through excellent execution and supply chain flexibility, and its service business also shows sustained growth potential.

"However, it should be noted that Google's TAC policy ruling, increased tariff-related costs, and a lack of breakthrough AI features in the iPhone product cycle will still suppress stock price performance," Yang added.

Morgan Stanley maintained an "Overweight" rating, raising the target price from $235 to $240. The analysis team led by Erik Woodring stated that this is Apple's strongest quarterly report and performance guidance in over two years, with hardware products, service business, and various regional markets all exceeding expectations.

However, the Woodring team added, "Based on historical experience, this should have triggered a stronger bullish sentiment, but we expect Apple's stock price to struggle to achieve a breakthrough increase until tariffs and regulatory policies become clearer."