Shares of Apple (AAPL) were relatively flat after hours, up about half a percentage point, following a solid Q3 result. As artificial intelligence (Apple Intelligence) and the highly anticipated next iPhone 16 dominate the discussions, other innovations like updates on Apple Vision Pro and new spatial content are poised to make significant impacts sooner than anticipated. Despite the minimal shift upward after the latest quarterly beat, the bullish outlook remains unwavering.
For now, all eyes are on Apple Intelligence as we approach what could potentially be an iconic iPhone supercycle.
Analyze Apple’s Steady Performance in the Third Quarter
The recent quarter didn’t hold many surprises. Apple’s Q3 surpassed expectations, with a 5% year-over-year revenue increase, while earnings per share stood at $1.40, comfortably beating the $1.34 estimate. Noteworthy, iPhone sales reached $39.2 billion, marginally below the $38.9 billion from the same period last year.
Despite the imminent arrival of Apple Intelligence in the iPhone 15 Pro, the anticipation for the next iteration is palpable, with consumers seemingly holding off for the upcoming release.
CEO Tim Cook expressed enthusiasm for Apple Intelligence during the conference call following the quarterly results, despite the recent news of a slight delay in its release. Taking a cautious approach to refining groundbreaking features before launch has its merits, especially considering the stumbles seen with Alphabet’s Google and its Gemini language model launch.
As AAPL stock saw a modest 0.7% increase post-earnings, it appears that investors and analysts might have missed crucial hints about Apple Intelligence during the conference call. Nonetheless, there were significant insights to glean from the call that may have been overlooked by many.
Insights into Apple Vision Pro’s Positive Trajectory
Although Vision Pro sales currently represent a fraction of total revenues and have minimal impact on AAPL stock, the recent advancements and future direction are worth monitoring for long-term shareholders. Apple unveiled its mixed-reality device over a year ago, and while initial excitement has waned, the developments in Vision Pro and spatial computing shared during the Q3 2024 conference call present promising prospects.
Among notable highlights are the international rollout of Vision Pro, upgrades in visionOS 2 providing enhanced workspace customization and immersive movie experiences, and a promising lineup of Vision Pro exclusive content.
Content quality plays a pivotal role in enticing subscribers to Apple TV+ and driving adoption of new devices like spatial computers. Apple’s initiative to expand its spatial content offerings, potentially securing additional Hollywood licensing agreements, showcases its foray as much into the metaverse as it does into AI.
While the allure of Apple Intelligence and a potential iPhone supercycle may already be factored into the stock following a recent 7% correction, Vision Pro stands as an intriguing wildcard that could justify the current 29.90 times forward price-to-earnings (P/E) ratio.
Analyst Perspective on AAPL Stock
According to TipRanks, AAPL stock holds a Moderate Buy rating. Out of 33 analyst ratings, 24 are Buy, eight are Hold, and one is a Sell recommendation. The average price target for AAPL stock is $246.89, suggesting a potential upside of 12.3%, with price targets ranging from $180.00 to $300.00 per share.
Explore more AAPL analyst ratings
Final Thoughts on Apple’s Trajectory
Apple’s Q3 performance was commendable, yet failed to create significant ripples. In the face of headwinds impacting the tech sector at large, Apple stock emerges as a compelling value proposition post-earnings.
While the imminent launches of the iPhone 16 and Apple Intelligence garner significant attention, the evolving Vision Pro content pipeline may not be receiving its due spotlight. Irrespective, the current positioning of the stock presents an intriguing prospect as the tech correction enters the month of August.