Evercore ISI Maintains Apple as Top Pick in IT Hardware & Networking
Evercore ISI has reaffirmed Apple Inc. (NASDAQ:AAPL) as its leading stock in the IT Hardware & Networking sector, assigning an Outperform rating and a price target of $365 per share.
Apple’s June quarter results were broadly in line with expectations, excluding tariff benefits. The company posted revenue of $109.4 billion, representing 16 % year‑over‑year growth, and earnings per share of $1.91, marginally above Street estimates of $109.0 billion in revenue and $1.89 EPS. Revenue growth was driven by a 22 % increase in iPhone sales, a 29 % rise in Mac sales, while Services grew 12 %.
For the September quarter, Apple guided sales growth of 9‑11 % and implied EPS of approximately $1.97.
Evercore ISI highlighted four key focus areas: (i) supply‑chain constraints on iPhone, Mac and iPad expected to create a 250‑basis‑point headwind amounting to $3.0 billion in the September quarter; (ii) higher memory costs compressing gross margins by 120 basis points; (iii) Services growth decelerating to 12 % with softness in App Store gaming; and (iv) Greater China revenues expanding 22 % for the third consecutive quarter of over 20 % growth, achieved prior to the Apple Intelligence rollout.
The firm believes Apple’s guidance contains extra conservatism and cites potential upside catalysts such as the launch of iPhone 18 with associated price increases, iPhone upgrade programs and carrier incentives, Siri AI feature rollouts, and acceleration of Services and Wearables in the second half of the year.
Analyst reactions were mixed: TD Cowen raised its price target citing future product pricing, Goldman Sachs lowered its target due to the forward guidance, and KeyBanc reiterated an Underweight rating on valuation concerns.