Apple Stock: Analysts Forecast Massive Jump in Earnings

In the second quarter, Apple’s earnings surprised, coming in at 1.40, compared to estimates of 1.34. At the same time, the company’s revenue jumped to 85.777 billion, above estimates of 84.433 billion.

On Thursday, economists expect another stellar performance, with estimated earnings at 1.60 and revenue at 94.521 billion. A better-than-expected result would boost Apple shares to new highs.

Apple Technical Analysis

As the price climbs within the ascending triangle, it gets tighter and tighter, indicating a drop in volatility. Moreover, it is a sign that traders are undecided. However, this will likely soon change with a significant catalyst.

The price faces solid resistance at the 237.13 level that has kept bulls at bay. However, a significant catalyst might prompt bulls to break above this resistance and make new highs in the uptrend. At the same time, the price would break out of its ascending triangle to indicate a surge in bullish momentum and a steeper trend.

However, there is also a chance that the catalyst will lead to a breakout to the downside. Such an outcome would pave the way for bears to revisit the 220.25 support level. A bigger decline would target a lower support at 199.21. Whichever the direction, a breakout from the triangle will likely lead to an impulsive move.

On the daily chart, the price has also paused to trade in an ascending triangle. However, here, the resistance line is horizontal at the 237.13 level. Before this pattern, the price was trading in a strong uptrend, respecting the 22-SMA as support. At the same time, the RSI stayed near the overbought region, suggesting solid bullish momentum. Therefore, the ascending triangle pattern might only be a pause in the uptrend.

However, the pause has shown some weakness in bulls as the RSI has made a bearish divergence. This is a sign that bulls are exhausted and might give up control, leading to a reversal.

Nevertheless, bulls might only be waiting on the sidelines ahead of the earnings report. A positive report would see many return to take big positions that would propel the price past the 237.13 resistance level. On the other hand, a downbeat report would motivate more investors to sell, leading to a breakout to the downside. This would allow the price to revisit the 220.25 and 199.21 support levels.

Key Support Levels

Support 1: 220.13, a strong 4-hour swing low and daily support and resistance level

Support 2: 199.21, a recent daily swing low

Key Resistance Levels

Resistance 1: 237.13, a recent 4-hour and daily swing high

Apple Fundamental Analysis

Apple stock has continued to make new record highs along with other US equities amid several factors. However, the main one is that the company has performed better than economists expected.

In the upcoming earnings report, economists expect the company’s revenue to jump by the most in two years. This is because iPhone demand in China soared with the introduction of the iPhone 16 series and a drop in prices. At the same time, analysts believe there will be a 3.8% increase in iPhone sales. Meanwhile, sales in the service business might jump by 13.3%.

A better-than-expected earnings report will likely lead to a rally in the Apple stock that might boost the broader Nasdaq 100. On the other hand, a miss could disappoint investors and cause a drop in share prices.

At the same time, investors will closely monitor the upcoming presidential election, which might increase market volatility. At the same time, data from the US will continue shaping the outlook for Fed rate cuts.

Final Thoughts

In the second quarter, Apple’s earnings beat estimates, leading to a rally in its shares. This quarter, economists expect an even more significant jump in earnings and revenues. Another upbeat report might propel the stock to new record highs. On the other hand, a miss might cause a pullback. At the same time, market participants will remain cautious before the US presidential election.

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