Apple (AAPL) stock is the best Dow Jones stock out of the gate Friday after the technology giant beat top- and bottom-line expectations for its fiscal 2025 first quarter.
In the three months ending December 28, Apple's revenue increased 4% year over year to $124.3 billion, boosted by Services revenue that was up 13.9% to $26.3 billion. Its earnings per share (EPS) rose 10.1% from the year-ago period to $2.40.
"Our record revenue and strong operating margins drove EPS to a new all-time record with double-digit growth and allowed us to return over $30 billion to shareholders," said Apple Chief Financial Officer Kevan Parekh in a statement. "We are also pleased that our installed base of active devices has reached a new all-time high across all products and geographic segments."
These results beat analysts' expectations. Wall Street was anticipating total revenue of $124.1 billion, Services revenue of $26.1 billion and earnings of $2.35 per share, according to CNBC.
Apple also said that Mac sales increased 15.5% to $9 billion and iPad sales rose 15.2% to $8.1 billion. On the other hand, iPhone sales decreased 0.8% to $69.1 billion and Wearables, Home and Accessories [Other products] sales fell 1.7% to $11.8 billion.
Analysts were anticipating Mac revenue of $8 billion, iPad revenue of $7.3 billion, iPhone revenue of $71 billion, and Other products revenue of $12 billion.
The report also showed sales in China fell 11% year over year, while all other regions saw growth.
Is Apple stock a buy, sell or hold?
Apple shares struggled to start the new year, but they have been trending higher over the past two weeks. Longer term, AAPL is up 30% year over year, outpacing the S&P 500's 23% gain. And Wall Street remains upbeat toward the blue chip stock.
According to S&P Global Market Intelligence, the average analyst target price for AAPL stock is $251.33, representing implied upside of nearly 6% to its January 30 close. Additionally, the consensus recommendation is Buy.
Financial services firm Wedbush is one of the most bullish outfits on the large-cap stock with an Outperform rating (equivalent to a Buy) and a Street-high $325 price target.
"Heading into Apple earnings many of the long time bears and haters on Cupertino were painting a demand picture that was dire for iPhone 16 and the overall Apple story," says Wedbush analyst Daniel Ives. But overall, this was "a clean quarter for Apple that marks the beginning of a multi-year upgrade cycle from iPhone 16 to iPhone 17," he adds.
Additionally, Ives notes that Apple gave "some important granular data further supporting Apple Intelligence-driven demand as markets where" the artificial intelligence (AI) feature was available saw "clear year-over-year performance outpace markets without this AI rollout."
