Apple Stock Gains Momentum Ahead of Earnings Report

Apple stock is showing signs of growth as the company prepares for its upcoming earnings report. However, analysts on Wall Street remain cautious despite the anticipation surrounding a mysterious launch event.

Scary Fast: What to Expect

Apple is set to host a virtual-only event called "Scary Fast" on Monday, where it is widely anticipated to unveil updates to its Mac personal computer lineup. The focus will primarily be on faster processor speeds for the new devices. While stockholders may hope for a positive boost, analysts are skeptical about the impact this alone will have on Apple's performance.

Analysts Remain Cautious

According to D.A. Davidson's Tom Forte, Apple has been trying to overcome a pullback in demand that occurred during the early days of the COVID-19 pandemic. Despite the forthcoming event, Forte believes that a faster processor may not be enough to drive significant growth. He maintains a Neutral rating and a target price of $180 for Apple stock.

Positive Pre-market Activity

Pre-market trading has shown a slight increase in Apple shares, up 0.6% at $169.20. This year, the stock has already gained 29%, although it has experienced a decline in value over the past three months from its peak near $200.

Mixed Earnings Season for Big Tech

The earnings season for Big Tech companies has delivered mixed results so far, with only Microsoft's cloud growth making a notable impression on the market. As Apple prepares to report its earnings, much attention will be given to the strength of iPhone sales. Additionally, there is pressure on the company to demonstrate its commitment to artificial intelligence technology.

Apple's AI Outlook

In a research note, KeyBanc analyst Brandon Nispel highlighted that Apple is trading at high multiples and faces challenges in key markets such as the U.S., which could impact international growth. While he acknowledges Apple's solid foundation in artificial intelligence, he also notes the limitations in incremental capital investment in the technology by 2024. Nispel maintains a Sector Weight rating on the stock with no specific target price.