Technology

Apple expected to post third consecutive down quarter, but its forecast is more important

Published

2 years ago

August 1, 2023

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Tim Cook arrives at Sun Valley’s Allen & Company meeting in Sun Valley, Idaho.

David A. Grogan | CNBC

Apple is expected to post its third consecutive quarterly revenue decline when it reports earnings after the bell Thursday. Wall Street expects $81.7 billion in sales, which would be down about 2.3% from last year.

Apple’s stock is up over 51% so far in 2023, hitting all-time highs. Investors see it as a safe haven with strong cash flow, despite worries about slowing demand for consumer goods, including PCs and smartphones.

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Analysts will also want to hear about how the current quarter, which ends in September, is shaking out. Apple hasn’t given guidance since 2020, citing uncertainty, but it provides investors with some data points that they can use to determine whether Apple sees overall sales growing or shrinking.

The company’s forecast will be more important. It may give clues as to whether global economies are set up for a “soft landing” after two years of interest rate hikes.

The June period is typically Apple’s slowest quarter of the year, while its fourth fiscal quarter often captures back-to-school laptop spending, a few days of new iPhone model sales — which usually come out in September — and shows Apple’s momentum heading into the holiday season.

“What will matter most will be management’s September quarter,” wrote Morgan Stanley analyst Erik Woodring in July, adding that he expects Apple to guide to year-over-year revenue growth again.

Emerging markets and China

Some analysts are eager to see Apple give data points on India sales. Apple CEO Tim Cook traveled to the country in April and spoke about hopes for significant growth in the region. India became one of Apple’s top five iPhone markets during the quarter, according to analyst estimates.

“On the call, we look for additional details on its expansion in India, including its retail and manufacturing presence,” D.A. Davidson analyst Tom Forte wrote this week.

But Apple’s older growth driver, China, is likely to be closely watched as well. Greater China — including Hong Kong and Taiwan — is Apple’s third-largest sales region, and it has reported two straight quarters of revenue decline, even as the region reopened after years of strict Covid lockdowns.

“In our conversations, most investors feel that a soft China could pose a risk to the numbers and further commentary, but we feel that Apple’s position in China is on a solid footing and that the company is likely to see only a small if any decline in its iPhone sales,” wrote Piper Sandler analyst Harsh Kumar.

Kumar said if China ends up being weak, it could be offset by strong sales momentum in India.

Apple mainly manufactures in China and investors will want to hear that the company has overcome many of the supply chain snags that have hampered sales over the past two years. If Apple stockpiled parts and has enough to make what it needs to produce, it could help margins, analysts say.

Services growth and A.I. acceleration

Apple’s profitable services division includes monthly subscriptions such as Apple Music, warranties under AppleCare, fees from the App Store, advertising revenue from search licensing agreements with Google, payments from Apple Pay and other products.

Wall Street likes to see Apple’s services business grow regularly and smoothly, because the margins on services are so much higher than when Apple sells hardware. In particular, many analysts want to see services reaccelerate after a few quarters of weak growth because of lagging App Store software sales.

Apple suggested a 5% year-over-year increase in services, and FactSet’s estimates more than $20.7 billion in revenue. But analysts will want to see Apple signal more growth than that.

“For the Services business, we expect year-over-year revenue growth to accelerate from the +5% level expected in [fiscal third quarter,] with our checks suggesting online advertising has improved,” Deutsche Bank analyst Sidney Ho wrote.

Analysts will also likely ask about artificial intelligence, given the industrywide obsession with the technology and a recent Bloomberg report that Apple is developing a ChatGPT-like AI model internally. Don’t expect Apple to gush about what it’s working on internally, though.

“With the official intro of Vision Pro, we expect Apple’s updated comments on its AI aspirations to be a focus (albeit likely very high-level),” wrote Wells Fargo analyst Aaron Rakers.

Estimates

Apple reports its results by product line, which can give investors a look into which businesses are thriving and which ones are in a down cycle.

IPhone, iPad and Mac sales are all expected to be down on an annual basis, with iPad sales projected to drop nearly 11%, according to FactSet estimates. Wearables, the product category with headphones and Apple Watch — and what will likely be the reporting category for Vision Pro when it goes on sale — is projected to decline less than 1%.

However, analysts expect Apple’s services business to grow 5.2% on an annual basis, which would be a bright spot for the report.

Here’s what Wall Street is expecting, per FactSet estimates:

Revenue: $81.7 billion
EPS: $1.19 per share

Here’s what to expect from the company’s product lines, per FactSet estimates:

iPhone revenue: $40.2 billion
iPad revenue: $6.4 billion
Mac revenue: $6.3 billion
Other products: $8.3 billion
Services: $20.7 billion

Technology

CNBC Daily Open: Too early to fret about tech pullback?

Published

2 hours ago

November 10, 2025

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CNBC Daily Open: Too early to fret about tech pullback?

Traders work on the floor of the New York Stock Exchange (NYSE) on November 07, 2025 in New York City.

Spencer Platt | Getty Images

November is historically the best month for the S&P 500, which gains an average of 1.8% during the period, according to the Stock Trader’s Almanac.

But the first full trading week of the month saw stocks caught in November rains.

The S&P 500 and Dow Jones Industrial Average each lost more than 1%, while the Nasdaq Composite shed around 3% — that’s its largest weekly loss since the tech-heavy index slumped 10% in the week ended April 4.

A few months ago, tariffs were the shadows that stalked stocks. Now, it’s fears that artificial intelligence-related stocks are trading at prices disconnected from what the firms are actually worth.

“You’ve got trillions of dollars tied up in seven stocks, for example. So, it’s inevitable, with that kind of concentration, that there will be a worry about, ‘You know, when will this bubble burst?‘” CEO of DBS, Southeast Asia’s largest bank, Tan Su Shan told CNBC.

Goldman Sachs’ CEO David Solomon also thinks choppy waters might be ahead.

“It’s likely there’ll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months,” Solomon said Tuesday at the Global Financial Leaders’ Investment Summit in Hong Kong.

That said, a pullback isn’t necessarily bad for stocks. It could even present “buying opportunities” for investors, according to Glen Smith, chief investment officer at GDS Wealth Management.

After all, earnings have been “reassuring” despite worries about tech stocks’ high valuations, Kiran Ganesh, multi-asset strategist at UBS, told CNBC. That means the rain might not last and the rally could find a way to run a little longer.

— CNBC’s Lee Ying Shan, Hugh Leask and Lim Hui Jie contributed to this report.

What you need to know today

Major U.S. index were mixed Friday stateside. The S&P 500 and Dow Jones Industrial Average inched up more than 0.1%, but the Nasdaq Composite closed 0.21% lower. The pan-European Stoxx 600 lost 0.55%. U.S. futures rose Sunday evening stateside.

China consumer prices pick up in October. The consumer price index, released Sunday, showed a 0.2% growth year on year. It beats analysts’ expectations of zero growth and is the first month since June that prices rose.

U.S. government on track to end shutdown. Enough Democratic senators had agreed to vote for a deal that would fund the U.S. government through the end of January, a person familiar with the deal told CNBC.

Another missed jobs report. The ongoing U.S. government shutdown — which is now the longest ever — means the Bureau of Labor Statistics couldn’t release its monthly employment data. Here’s what economists would have expected the report to show.

[PRO] Stocks that could bounce after sell-off. Using CNBC Pro’s stock screener tool, we found several names that are oversold, according to their 14-day relative strength index. This implies they could be due for a recovery in prices.

And finally…

Fluxfactory | E+ | Getty Images

A global wealth boom is fueling a rise in family office imposters

Fundraisers and fraudsters are presenting themselves as family office representatives, seeking to dupe gullible investors — and then there are also imposters who are in it just for an “ego boost,” several industry veterans told CNBC.

An information vacuum seems to have encouraged imposters. In many markets, genuine single family offices, or SFOs, are exempt from registering so long as they manage only family money. That privacy norm often makes verification hard, said industry experts.

— Lee Ying Shan

Technology

Week in review: The Nasdaq’s worst week since April, three trades, and earnings

Published

1 day ago

November 8, 2025

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Week in review: The Nasdaq's worst week since April, three trades, and earnings

Technology

Too early to bet against AI trade, State Street suggests

Published

1 day ago

November 8, 2025

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Too early to bet against AI trade, State Street suggests

Momentum and private assets: The trends driving ETFs to record inflows

State Street is reiterating its bullish stance on the artificial intelligence trade despite the Nasdaq’s worst week since April.

Chief Business Officer Anna Paglia said momentum stocks still have legs because investors are reluctant to step away from the growth story that’s driven gains all year.

“How would you not want to participate in the growth of AI technology? Everybody has been waiting for the cycle to change from growth to value. I don’t think it’s happening just yet because of the momentum,” Paglia told CNBC’s “ETF Edge” earlier this week. “I don’t think the rebalancing trade is going to happen until we see a signal from the market indicating a slowdown in these big trends.”

Paglia, who has spent 25 years in the exchange-traded funds industry, sees a higher likelihood that the space will cool off early next year.

“There will be much more focus about the diversification,” she said.

Her firm manages several ETFs with exposure to the technology sector, including the SPDR NYSE Technology ETF, which has gained 38% so far this year as of Friday’s close.

The fund, however, pulled back more than 4% over the past week as investors took profits in AI-linked names. The fund’s second top holding as of Friday’s close is Palantir Technologies, according to State Street’s website. Its stock tumbled more than 11% this week after the company’s earnings report on Monday.

Despite the decline, Paglia reaffirmed her bullish tech view in a statement to CNBC later in the week.

Meanwhile, Todd Rosenbluth suggests a rotation is already starting to grip the market. He points to a renewed appetite for health-care stocks.

“The Health Care Select Sector SPDR Fund… which has been out of favor for much of the year, started a return to favor in October,” the firm’s head of research said in the same interview. “Health care tends to be a more defensive sector, so we’re watching to see if people continue to gravitate towards that as a way of diversifying away from some of those sectors like technology.”

The Health Care Select Sector SPDR Fund, which has been underperforming technology sector this year, is up 5% since Oct. 1. It was also the second-best performing S&P 500 group this week.

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