Following stronger-than-expected Q1 earnings from Microsoft (NASDAQ:) and Meta Platforms (NASDAQ:), investor attention now turns to Apple Inc. (NASDAQ:), which is set to report its results tonight, after the market closes. The report comes at a time when the broader market remains volatile, despite a solid rebound from the lows recorded earlier this month.
Apple shares tumbled nearly 25% in just a few sessions following Donald Trump’s surprise announcement on April 2 of significantly higher tariffs. AAPL hit a low of $169.21 on April 8—its weakest level in nearly a year.
Since then, the stock has staged a sharp recovery, erasing nearly all of the losses tied to the tariff news. As of Wednesday’s close, Apple was trading at $212.50, up 25.5% from its April 8 low.
With the bulk of its manufacturing based overseas—particularly in China—Apple was among the companies most exposed to the tariff fallout. However, investor concerns eased somewhat after reports of possible tariff exemptions for smartphones and growing signs that Donald Trump might be open to further negotiations with Beijing.
What Are Analysts Expecting From Apple’s Results?
Apple’s fiscal second-quarter earnings are expected to draw intense scrutiny given the uncertain environment. The consensus forecast calls for earnings per share (EPS) of $1.62, representing a 5.9% increase year-over-year, and revenue of $94.56 billion, up 4.1% from the same quarter last year.
Source: InvestingPro
It’s also worth noting that Apple has topped consensus earnings estimates for eight straight quarters.
Source: InvestingPro
That said, while any earnings surprise could move the stock, investors are likely to focus more on Apple’s forward guidance.
Market Braces for More Details on U.S.-China Trade Tensions
Investors are keen to hear Apple’s strategy for navigating the new tariff landscape, and how the company expects these measures to affect revenue and profit over the rest of the year.
In particular, markets will be looking for updates on Apple’s potential shift in manufacturing to India, and whether the company plans to absorb the costs of tariffs or pass them on to consumers.
Given the recent tariff announcements, Apple is unlikely to present a more optimistic outlook than it did in its previous earnings release. A downward revision to full-year 2025 guidance is a strong possibility—and that could weigh heavily on the stock.
Moreover, the InvestingPro Fair Value estimate—based on 14 widely used valuation models—suggests that the stock may be overvalued. The fair value stands at $177.57, which is more than 16% below Wednesday’s closing price.
Source: InvestingPro
The models used to determine this valuation are also tightly clustered, with estimates ranging from $158.31 to $196.94.
Conclusion
In the context of the ongoing U.S.-China trade dispute and Apple’s heavy reliance on China for production, the stock appears to carry considerable risk. This is especially true given its rapid rebound from April’s lows, which has nearly erased the market reaction to the tariff announcement—even though no trade resolution has been reached. In this environment, even a Q1 beat may not be enough to support further gains, and Apple may struggle to offer an upbeat outlook for the quarters ahead.
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