Apple Is Down for the Year—Opportunity or Time to Move On?

Key Points

• Apple's stock price is down, but investors shouldn't hurry out of the market because the long-term trends are intact. 
• Market support is strong, including institutional buying and analyst sentiment trends.
• This stock could rise by 30% by year's end, catalyzed by the FQ2 earnings report. 

Apple NASDAQ: AAPL is down for the year in early March, but don’t let that get you down. Apple’s woes are minimal in the grand scheme of things and unlikely to result in a massive stock price decline.

The more likely scenario is that Apple’s stock price experiences market turbulence; it may correct to a lower price point, but the uptrend will remain intact.

The uptrend will remain intact because Apple is an innovative market leader, commanding sizeable portions of the mobile and PC markets. It may have been late to the AI game, but it isn’t out, and it is on track to capitalize on AI's advance. 

Market Support for Apple Remains Robust

Apple's market support remains robust, including among retail investors, analysts, and institutions. Institutional activity is noteworthy because the group owns nearly 70% of the stock; their activity reverted to buying on balance in Q3 of 2024, ramped in Q4, and again in the first two months of 2025. 

Institutional activity in Q1 is a multiyear high, netting about $6 billion in shares, or about 1.7% of the market cap when trading near $235. 

Analysts' activity is equally bullish, including sufficient positive revisions and upgrades to put the stock on MarketBeat’s Most Upgraded Stock list. The Most Upgraded Stocks list tracks the 100 most upgraded stocks in the preceding 90 days, and Apple was ranked 36 in early March. 

Coincidentally, MarketBeat tracks 36 analysts with current ratings, and they have the stock pegged at Moderate Buy. The Moderate Buy rating has a bullish bias because 64% of the ratings are Buy or better, and the price target revision trend is positive.

The consensus in early March offers little upside but is up 20% year-over-year, 4% since late 2024, and steady since the Q4 2024 earnings release, with revisions leading to the high-end range. That puts the market at $235 by year’s end, a gain of nearly 40% from the critical support target. 

There Is Potential for a Catalyst in Apple’s FQ2 Outlook

The analysts have set the bar for Apple’s FQ2 low, with nearly 90% of analysts lowering their targets since the Q1 release. This has the company set up to outperform an already solid outlook, including 5% top-line growth and a wider margin. Earnings are expected to grow by roughly 11% and may exceed analysts' forecasts due to AI efficiency internally and with sales.

Apple uses AI internally to enhance device performance, user behavior/resource allocation, automation, supply chain management, and customer service. The company uses AI to improve sales by embedding features into its ecosystem, including Siri. 

The longer-term outlook is equally robust. The analysts tracked by MarketBeat forecast a high-single-digit revenue CAGR through the middle of the next decade with a widening margin. Earnings are expected to grow at a high-teens CAGR in the same period, putting the valuation below 10x earnings before 2035. The stock price could increase more than 200% in this scenario, aligning with the March 2025 valuation of 32x.

Apple’s balance sheet and capital return play into the stock price outlook. The company maintains a fortress balance sheet with 2024 highlights, including increased cash and assets, reduced debt and liability, and increased shareholder equity despite robust share buybacks. Buybacks shaved 2.7% off of the quarterly count in Q4 and are expected to remain strong in 2025. 

Apple Stock Crossed a Critical Threshold: Support Rises to Match

Apple’s market crossed a critical threshold in late 2024, rising to a new all-time high and retreating to confirm support at the 150-day EMA. The move signals the continuation of underlying trends in 2025, although the exact timing of when a new high may be reached is unknown. 

The critical support target is the 30-day EMA, which is near $230; if broken, a deeper movement is likely. The critical resistance targets are at $250 and $260; a move to $300 is expected if they are surpassed.