Last Update04 Sep 25

Analysts remain constructive on Apple given the positive implications of the Google antitrust ruling for Services revenue, growing confidence in Services' gross profit contribution, and medium-term catalysts from anticipated hardware innovation, though muted iPhone momentum and a cautious reception to AI integration temper near-term enthusiasm; as a result, the consensus price target is unchanged at $235.53.

Analyst Commentary

The recent Google antitrust ruling is seen as a major positive for Apple, allowing continued substantial payments from Google for default Safari search placement, annual renegotiation rights, and providing leverage for future search engine or AI partnerships; the outcome was less restrictive than feared and supports stronger Services revenue confidence.
Bullish analysts are assigning higher valuation multiples to Apple, highlighting Services’ increasing contribution to gross profits (projected to overtake iPhone in FY25) and its secular, less cyclical nature, underpinning long-term growth expectations.
Near-term iPhone expectations remain muted with limited innovation in iPhone 17, but upcoming foldable iPhone (expected 2026) is seen as a major medium-term catalyst with strong revenue and margin potential; form factor changes, carrier promotions, and possible price increases are additional positive drivers, though investor expectations for unit growth are tempered.
AI strategy rollout at WWDC 2025 received mixed reviews: some analysts see Apple’s incremental approach and deep ecosystem integration as laying groundwork for future leadership, but others are cautious due to the lack of major feature launches and see strategic acquisitions (e.g., potential Perplexity deal) as both an opportunity and risk to accelerate progress.
Operationally, Apple benefits from resilient iPhone demand in key regions (e.g., China), strategic supplier agreements (e.g., MP Materials for magnets), and robust supply chain data; leadership changes in the C-suite and global macro factors (tariffs, FX) also contribute to changing sentiment but are not seen as immediate value drivers.

What's in the News

Apple is experiencing significant AI talent attrition, losing high-profile researchers and engineers—including top foundation models leads—to competitors such as Meta, OpenAI, and Anthropic, with roughly a dozen recent departures (Bloomberg, FT).
Apple is in advanced discussions with Google to evaluate and potentially use Google's Gemini AI to power an upgraded Siri with AI search capabilities, following a formal agreement to test Google's model; Apple's own AI web search tool, "World Knowledge Answers," is also in development (Bloomberg).
Apple has cautioned that proposed UK regulations similar to the EU's could delay feature rollouts, citing prior delays for European users due to regulatory compliance and warning of negative impacts for consumers and developers (BBC).
Apple will globally distribute its six curated Apple Music radio stations via a new partnership with TuneIn, as part of an effort to convert more radio listeners into paid Apple Music subscribers amid trailing Spotify (WSJ).
A German court ruled Apple can no longer market the Apple Watch as “CO2-neutral” in the country due to unsubstantiated environmental claims, breaching German competition law (Reuters).

Valuation Changes

Summary of Valuation Changes for Apple

The Consensus Analyst Price Target remained effectively unchanged, at $235.53.
The Consensus Revenue Growth forecasts for Apple remained effectively unchanged, at 5.3% per annum.
The Discount Rate for Apple remained effectively unchanged, at 8.23%.

Expansion in emerging markets and growing services ecosystem are driving higher global reach, accelerated revenue, and increased stability in margins.
AI-powered features, enhanced wearables, and supply chain optimization support future product differentiation, new revenue streams, and improved cost management.
Regulatory pressures, supply chain risks, market saturation, and evolving technology could threaten Apple's margins, growth trajectory, and long-term competitive advantage.

Catalysts

About Apple

Designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide.What are the underlying business or industry changes driving this perspective?

Rapid growth in emerging markets, including India, South Asia, and the Middle East, combined with Apple's ongoing expansion of retail and online channels in these regions, is increasing the company's global installed base-positioning Apple to drive higher long-term revenue and services adoption.
Introduction and integration of AI-powered features (Apple Intelligence) across devices and platforms, leveraging proprietary silicon, is expected to drive a new upgrade cycle and enhance device differentiation-supporting higher ASPs, sustained product revenue growth, and cost efficiencies that improve gross margins and earnings.
Significant investment in expanding Apple's high-margin Services ecosystem (App Store, iCloud, Apple Music, TV+, financial services) is generating accelerating double-digit revenue growth and record paid subscriptions, contributing to higher and more stable net margins.
Rising adoption and enhancement of wearables (Apple Watch, AirPods) and health-focused device features are creating new revenue streams and deepening ecosystem engagement, supporting future top-line growth and services cross-sell opportunities.
Ongoing supply chain optimization and domestic investment (including U.S. manufacturing and rare earth materials sourcing) aim to mitigate tariff and geopolitical risks-supporting gross margin stability and reducing potential cost headwinds over the longer term.

Apple Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Apple's revenue will grow by 5.3% annually over the next 3 years.
Analysts assume that profit margins will increase from 24.3% today to 28.0% in 3 years time.
Analysts expect earnings to reach $133.5 billion (and earnings per share of $9.58) by about September 2028, up from $99.3 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $112.8 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 31.4x on those 2028 earnings, down from 35.6x today. This future PE is greater than the current PE for the US Tech industry at 21.8x.
Analysts expect the number of shares outstanding to decline by 1.82% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.23%, as per the Simply Wall St company report.

Apple Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Increasing and unpredictable tariff-related costs, highlighted by the $1.1 billion impact expected in the next quarter and ongoing exposure to U.S.-China and other global trade tensions, threaten to erode gross margins and create significant earnings volatility.
Heightened regulatory and legal scrutiny on Apple's App Store (including ongoing lawsuits like Epic v. Apple) and reliance on revenue-share agreements (e.g., with Google) put at risk Apple's high-margin Services revenue and could compress future net margins.
Potential market saturation and slower hardware upgrade cycles-reliant on promotional activity, tariffs, and product strength to drive recent growth-signal that sustaining double-digit product revenue increases may become harder, pressuring both topline growth and profit margins long term.
Persistent dependence on supply chains concentrated in China, India, and Vietnam continues to expose Apple to geopolitical risks, protectionist measures, and higher costs, which may negatively impact both revenue consistency and operating margins if disruptions intensify.
The rapid evolution of AI, new interaction paradigms, and potential commoditization of device-level AI could challenge Apple's innovation pipeline-if Apple fails to launch successful new product categories or maintain unique differentiation, its long-term growth, brand premium, and earnings power could diminish.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $235.526 for Apple based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $300.0, and the most bearish reporting a price target of just $175.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $477.4 billion, earnings will come to $133.5 billion, and it would be trading on a PE ratio of 31.4x, assuming you use a discount rate of 8.2%.
Given the current share price of $238.47, the analyst price target of $235.53 is 1.3% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.