Apple Stock Can Brush Off Tariff Concerns, Analyst Says Q2 Beat Coming Thanks To iPhone Demand

An Apple Inc (NASDAQ:AAPL) analyst says the company will beat second-quarter earnings per share and revenue estimates with iPhone strength overshadowing any potential tariff concerns.

The Apple Analyst: Goldman Sachs analyst Michael Ng reiterated a Buy rating on Apple and lowered the price target from $259 to $256.

The Analyst Takeaways: Ng highlights his confidence in Apple's iPhone sales and demand ahead of the company's second-quarter financial results on May 1 after market close.

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The analyst said the key debates for Apple's earnings will be on tariffs and demand.

Ng said the reciprocal tariff exemptions on smartphones and PCs announced on April 11 should help insulate Apple from large impacts in the near-term.

The analyst estimates Apple will report iPhone revenue of $47.8 billion in the second quarter, above a consensus estimate of $45.6 billion and up 4% year-over-year.

Ng said iPhone revenue growth will come from the launch of the iPhone 16e and demand pull-forward due to tariff concerns.

The analyst also estimates that Apple's Services revenue will be up 11% year-over-year to $26.5 billion helped by items like the App Store, iCloud+, AppleCare+, Apple One and Apple Pay.

"Against the backdrop of elevated recession risks, demand drivers such as the extended replacement cycle, new product innovation, new market expansion could be balanced by weaker consumer discretionary spending and US-brand sentiment shifts," Ng said.

Ng said tariff policy and growth concerns are an "overhang for the stock." A chart from the analyst shows that Apple stock had its worst January and March of the past 10 years in 2025.

Apple has been diversifying production away from China and moving toward India and other regions. The Cupertino, California-based company still faces uncertainty on how some items will be treated in the potential trade war.

Apple could also negotiate with suppliers to lower costs or could choose to increase the price of the iPhone. Ng said Apple last increased the price on the base iPhone in 2020 with the iPhone 12.

"Sentiment could improve in the middle of the year, where focus should pivot towards new iOS and Apple Intelligence features to be released over the rest of C2025, as well as the fall launch of the iPhone 17."

Ng said Apple's installed user base, growth in services and new product innovation should offset cyclical headwinds to product revenue.

Price Action: Apple stock is up 2.3% to $204.27 on Wednesday versus a 52-week trading range of $166.21 to $260.09. Apple stock is down 16.4% year-to-date in 2025 and up 22% over the last year.

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