Nasdaq 100 forecast: How will Apple earnings impact AAPL stock?

Key takeaways

• Revenue to fall as acceleration in services growth fails to counter softer demand for consumer electronics
• All eyes are on the initial success of the iPhone 15, but this is unlikely to contribute much to fourth-quarter results
• Concerns growing that iPhone 15 is not as popular as its predecessor in China as Huawei sweeps-in with its Mate 60 series
• First real test for iPhone 15 will be in the first quarter covering the busy holiday shopping season
• Outlook is key, with Wall Street anticipating a return to topline growth in the current quarter
• Apple stock hit 6-month lows last week before rebounding

When will Apple release Q4 earnings?

Apple is scheduled to release fourth quarter results after US markets close on Thursday November 2. A conference call is scheduled on the same day at 1400 PT.

Apple Q4 earnings consensus

Apple is forecast to report a 0.9% year-on-year drop in revenue in the fourth quarter to $89.3 billion and diluted EPS is seen rising 8.1% to $1.39.

Apple earnings preview

Apple has already warned that revenue will be down for a fourth consecutive quarter in the final three months of its financial year. Sales of its flagship iPhone, which accounts for about half of its revenue, are predicted to rise 2.3% from last year and services growth is accelerating, but that will not be enough to counter the ongoing weakness in demand for iPads, Macs and wearables.

The iPhone 15 only hit the shelves in September, so this quarter will only reflect a couple of weeks of sales at best – and could possibly be negligible considering reports of lengthy delivery times. A beat on iPhone sales would still help shore-up confidence, but the first real test will be in the final three months of 2023 covering the busy holiday shopping season.

That will shift the spotlight on its outlook for the iPhone 15, especially in China. There have been a wave of reports that the iPhone 15 is not proving as popular as its predecessor in China since being launched. Figures from Counterpoint Research suggested iPhone 15 sales were down around 4.5% in the first 17 days of being launched, while Jefferies warned the decline was by a sharper double-digit percentage. More recently, research firm GfK said sales were down 6% in the first month, while separate data from IDC forecast iPhone 15 sales were down 4% in the third quarter.

Regardless of what report you focus on, it appears the verdict is that the iPhone 15 is simply not selling as well in China as hoped. China accounts for about one-fifth of Apple’s total revenue, making it a major market.

That could be down to a downbeat economy. The Chinese economy has not rebounded as expected since the government abandoned its fight against Covid-19. However, there are concerns that softer demand could be more down to a rise in nationalism as geopolitical tensions between the US and China heats up, with tech being wielded as a weapon by both sides. That is reflected by several reports suggesting Chinese rival Huawei is swooping-in and convincing Chinese customers to shop local, with its new Mate 60 series proving hugely popular and detracting attention away from the iPhone 15. Some have suggested Huawei has even leapfrogged Apple in terms of market share, which would be a seismic shift.

Apple has not been providing formal guidance for years, citing uncertain conditions, but investors will keep an eye on commentary on what to expect in the new financial year. Wall Street is expecting revenue to start growing again in the first quarter, driven by the iPhone 15 and a turnaround in Mac and wearables, and helped by easier comparatives. The smartphone and the broader electronics market is showing signs that it is hitting a bottom and that consumers will start upgrading their tech bought during the pandemic, but markets are still waiting for confirmation and wary of the threat posed by the uncertain economic outlook and a slowdown in consumer spending.

Where next for AAPL stock?

Apple shares have set a series of lower-highs and lower-lows since peaking at the start of August, just before it released its third quarter results.

The stock sank below the 200-day moving average for the first time in eight months last week and hit its lowest level in six months before rebounding. $166.90 is now the initial floor that must hold to avoid a new lower-low being set. It risks dropping toward $164.30, marking the peak we saw in September 2022 and the floor we saw in May 2023, if it slips below here.

On the upside, the 200-day moving average is the first hurdle that needs to be cleared and a jump above $173.50 is needed to set a new higher-high and provide hope that tides are turning. It can target $172 in the meantime and reclaim the August low.

Nasdaq 100 analysis: Where next?

Apple is the largest individual component of the Nasdaq 100, making it the index to watch ahead of its results.

The index has been in a downtrend since late July and slumped to its lowest level in five months last week. It found support at 14,125 before rebounding. The 200-day moving average will have to provide a safety net if this fails to hold and any slip below here would be significant considering the index has not traded below the MA since early 2023!

The initial upside targets are the September-low of 14,430 and then the August-low of 14,550. A move above 14,730 is needed to set a new higher-high, roughly aligned with the 20-day moving average.

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