Tech giant Apple (AAPL) posted better-than-expected results for the second quarter of Fiscal Year 2025, beating Wall Street estimates on both revenue and profit. However, despite the solid performance, the stock slipped in after-hours trading and is down about 3% in today’s pre-market session, as investors react to tariff concerns.
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On the earnings call, Apple warned of a $900 million tariff-related headwind in the current quarter. When pressed for insights on potential tariff impacts beyond June, CEO Tim Cook declined to speculate, saying he didn’t want to “predict the future.”
On the positive side, Apple returned more than $29 billion to shareholders last quarter, including $3.76 billion in dividends and $25.24 billion in share repurchases. The company also announced a 4% dividend hike and approved an additional $100 billion share buyback plan. Encouraged by Apple’s strong fundamentals and investor-friendly moves, Citi’s Top analyst Atif Malik, reiterated a Buy rating on the stock. However, he lowered his price target to $240 from $245, pointing to near-term tariff uncertainties.
Malik’s Views on Apple Stock
Highlighting solid March quarter results, the five-star analyst pointed to stronger-than-expected iPhone sales, which grew 2% year-over-year, and a 12% increase in services revenue. Gross margin came in at 47.1%, in line with expectations. Malik noted that sales in Greater China stabilized, declining just 2% year-over-year (flat excluding currency impacts), marking a notable improvement from an 11% drop in the December quarter. He attributed the recovery to demand for iPhones, helped by Chinese government subsidies.
Looking ahead, Malik flagged Apple’s June quarter guidance, which calls for low- to mid-single-digit revenue growth and a 46% gross margin, weighed down by an expected $900 million tariff hit. That implies EPS could come in about 4 cents below Street forecasts. Still, he was encouraged by Apple’s decision to hike its dividend by 4% and authorize a new $100 billion share buyback.
While he lowered his FY25–27 EPS estimates slightly to account for tariff impacts, Malik remains constructive on Apple’s valuation. He continues to view the stock as a defensive pick within the “Magnificent Seven” based on its strong free cash flow and return on invested capital profile.
It is worth noting that Malik ranks 39 out of more than 9,437 analysts tracked by TipRanks. He has a success rate of 60%, with an average return per rating of 24.9% over a one-year timeframe.
Is AAPL Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 18 Buys, seven Holds, and three Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average AAPL price target of $232.92 per share implies 9.19% upside potential.
