To The Moon

$Apple(AAPL)$ is set to report its fiscal Q3 2025 earnings on Thursday, July 31, 2025, after market close. This is a seasonally weaker quarter for Apple, preceding its major fall product launches.

EPS (Earnings Per Share): The consensus estimate is around $1.42 - $1.43, a slight increase from $1.40 in Q3 2024.

Revenue: Analysts expect approximately $88.96 billion - $89.1 billion. This represents a modest year-over-year growth of roughly 3.7% and aligns with Apple's prior guidance of "low to mid-single-digit" revenue growth.

Summary of Apple's Fiscal Q2 2025 Earnings (Ended March 29, 2025)

Apple reported better-than-expected results for its fiscal second quarter of 2025, driven by strong Services growth and a modest rebound in iPhone sales.

Revenue: $95.4 billion, up 5% year-over-year, which was at the high end of their guidance range. This beat analyst expectations.

Services Revenue: Reached an all-time high of $26.6 billion, growing 12% year-over-year. This was a significant highlight.

iPhone Revenue: $46.8 billion, up 2% year-over-year, showing a slight return to growth after previous declines. Commentary mentioned the "iPhone 16e" and new Macs/iPads with Apple silicon.

Mac Revenue: $7.9 billion, up 7% year-over-year.

iPad Revenue: $6.4 billion, up 15% year-over-year, indicating strong performance.

Wearables, Home and Accessories: $7.5 billion, down 5% year-over-year, marking a decline.

Diluted EPS: $1.65, up 8% year-over-year, setting a March quarter record and beating analyst consensus.

Gross Margin: 47.1%, which was at the midpoint of their guidance.

Capital Allocation: Apple's board authorized an additional $100 billion for share repurchases and increased the quarterly dividend by 4% to $0.26 per share, signaling confidence in its financial position.

Despite these positive results, the stock saw a slight dip initially in after-hours trading.

Lessons Learned from Q3 2025 Guidance (for the quarter ending June 2025)

Apple provided the following guidance for Fiscal Q3 2025 (the current quarter):

Revenue: Expected to grow in the low to mid-single digits year-over-year. This implies a revenue range roughly between $88 billion and $91 billion.

Gross Margin: Expected to be between 45.5% and 46.5%. Importantly, this guidance included an anticipated $900 million impact on costs due to tariffs.

Operating Expenses: Projected between $15.3 billion and $15.5 billion.

The Key Lessons Learned:

China Remains a Headwind: While iPhone revenue saw modest growth, sales in Greater China continued to decline by 2% year-over-year in Q2. The guidance's "low to mid-single digits" for overall revenue, particularly when factoring in a rebound in other regions, suggests persistent challenges in the crucial Chinese market due to increased local competition (like Huawei) and geopolitical factors.

Tariff Impacts are Real: Apple explicitly called out a $900 million tariff-related cost for the June quarter. This highlights the tangible financial impact of trade tensions on their supply chain and profitability, a risk factor investors must monitor. While Apple is diversifying manufacturing to India and Vietnam, the bulk of its production for most markets still originates from China, leaving it vulnerable.

Services Strength is Consistent: Services continues to be Apple's growth engine and a high-margin business. Its consistent double-digit growth (12% in Q2) reinforces its importance as a stabilizing factor for Apple's overall financial performance and valuation. Investors clearly rely on this segment to offset product cycle volatility.

Growth Still Moderate for a Tech Giant: Despite beating estimates, the overall revenue growth of 5% in Q2 and the "low to mid-single digit" guidance for Q3 indicate that Apple's massive scale means it can no longer deliver the hyper-growth rates of smaller tech companies. Investors are increasingly looking for efficiency and profitability from its mature ecosystem.

Capital Returns Remain Strong: The substantial $100 billion share buyback authorization signals Apple's commitment to returning capital to shareholders, which can support the stock price even during periods of slower growth.

Apple's Q2 2025 earnings showed resilience driven by Services and a slight iPhone rebound, but the guidance for Q3 underscored ongoing challenges in China and the material impact of tariffs, reminding investors that even a tech giant faces macro and geopolitical headwinds affecting its core business.

Key Metrics Investors Should Watch For Fiscal Q3 2025 Earnings

iPhone Performance: This remains Apple's largest revenue driver.

Sales Revenue: Despite some softness in demand, the market will assess if higher Average Selling Prices (ASPs) from a shift towards premium models are offsetting volume declines, especially in key markets like China. Look for commentary on the impact of Huawei's competition and any signs of recovery in China.

Impact of Apple Intelligence: While the full impact of Apple Intelligence will likely be seen in future quarters, investors will look for any early commentary or signals from management about its potential to drive an iPhone upgrade cycle.

Services Growth: This high-margin segment is crucial for Apple's overall profitability and valuation.

Revenue Growth Rate: Investors will want to see continued double-digit growth (analysts expect around $27.5 billion, up from $26.6 billion in Q2 2025). Key drivers include App Store sales, Apple Music, iCloud, and potential subscriptions related to Apple Intelligence.

Paid Subscriptions: While the "over 1 billion paid subscriptions" figure hasn't been updated recently, any fresh data or insights on monetization levels will be important.

Gross Margin: Apple guided for a gross margin of around 46% for Q3, which factors in a $900 million impact from tariff-related costs. Any deviation from this, or further commentary on tariff escalation (e.g., potential 25% tariffs threatened by Trump if iPhones aren't manufactured domestically), will be closely scrutinized.

Mac and iPad Sales: Look for performance updates, especially with new M4 chip MacBooks driving some demand and back-to-school season approaching.

Guidance for Q4 2025 (and potentially beyond): Apple's outlook for the crucial holiday quarter will be paramount. Investors want to hear about the anticipated impact of the new iPhones, any AI-driven upgrade cycle, and the overall demand environment.

Capital Allocation: Updates on share buybacks and dividends.

Apple (AAPL) Price Target

Based on 41 analysts from Tiger Brokers offering 12 month price targets for Apple in the last 3 months. The average price target is $231.35 with a high forecast of $300.00 and a low forecast of $139.00. The average price target represents a 9.51% change from the last price of $211.27.

Opportunities for Trading Short-Term Post-Earnings:

Expected Volatility: The options market is pricing in a significant price move, typically around 3.5% to 4.1% for Apple post-earnings. This indicates high anticipated volatility and offers opportunities for short-term traders.

"Beat and Raise" vs. "Beat and Muted Guidance":

Bullish Scenario: A strong beat on both EPS and revenue, particularly if driven by better-than-expected iPhone sales (especially from Apple Intelligence early adoption) or accelerated Services growth, coupled with optimistic guidance for Q4 (suggesting a strong upgrade cycle), could lead to a solid rally.

Bearish Scenario: Even with a beat on current quarter numbers, if iPhone sales decline more than expected, Services growth disappoints, or guidance for Q4 is conservative (especially regarding AI's financial impact or persistent tariff concerns), the stock could see a significant pullback. Apple's stock has often seen slight declines even after beating estimates in recent quarters, indicating that guidance and qualitative commentary are heavily weighed.

Implied Volatility Crush: Options premiums will be elevated pre-earnings. After the report, this implied volatility typically drops ("IV crush"). This presents opportunities for strategies like selling options (e.g., straddles, strangles) if you anticipate a smaller move than the market is pricing in or want to generate premium.

Technical Levels: Traders will watch key support levels (e.g., $193-$195 region, or $165-$169 for stronger support) for potential bounces on a dip, and resistance levels (e.g., $215-$216, then $222) for potential breakouts on positive news.

Technical Analysis - Exponential Moving Average (EMA)

Apple has earnings on Thursday, on Tuesday, it was down 1.3% getting rejected again from resistance 221 down to 213. But we should not be concerned with this short-term price action, as it does not matter, though it might be impacted from moves on $Meta Platforms, Inc.(META)$ and $Microsoft(MSFT)$ when Wednesday, they have earnings.

The expected move on on Apple is 3.65% to the upside which is probably going to put AAPL at the top end of the resistance range and this might give the bulls a chance to make a daily uptrend expansion, but in the event that the earnings turned out no good, AAPL gets shot down,then we will be going back down into support.

Most of the earnings will be around the iPhone sales of course and their revenue growth rate. I am also looking for the talk on tariffs most likely in its outlook guidance. Not forgetting the iPhone refresh cycle and also AAPL might also do some deal of buybacks.

So hope the bulls can make use of the positive momentum and continue to push for a daily uptrend continuation.

Considerations for Short-Term Trading:

Market Sentiment: Overall market sentiment towards big tech and growth stocks, particularly concerning AI, will play a role.

China Market: The performance in Greater China is a consistent concern, and any signs of stabilization or further weakness will be closely watched.

Risk Management: Earnings trades are high-risk due to unpredictable price swings. Implement strict risk management, including proper position sizing and stop-loss orders.

Summary

Apple's Q3 2025 earnings will be a nuanced event. While the numbers are important, the market will heavily scrutinize commentary on iPhone demand, the initial impact and future potential of Apple Intelligence, services monetization, and the effects of ongoing trade tensions.

Apple (AAPL) reports fiscal Q3 2025 earnings on July 31, 2025. Consensus estimates are $1.42-$1.43 EPS on ~$89 billion revenue, indicating modest growth.

Key metrics to watch: iPhone sales (especially China), Services revenue growth (expected double-digit), and gross margin (factoring in $900M tariff impact). Crucial is Q4 guidance regarding Apple Intelligence's potential to drive iPhone upgrades.

Expect high post-earnings volatility (~3.5-4.1% move priced). Opportunities exist for directional trades based on Services strength/iPhone recovery, or option selling on IV crush, but manage risk.

Appreciate if you could share your thoughts in the comment section whether you think Apple would be able to provide earnings beat amid concerns of the tariff impact and a positive outlook for its Apple Intelligence’s potential.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.