Apple Inc (NASDAQ: AAPL), a titan in the global technology industry, recently unveiled its second-quarter earnings report, marking both triumphs and challenges for the tech giant.
Despite surpassing Wall Street’s expectations, Apple’s performance fell short of its previous year’s benchmarks. The company reported quarterly revenue of $90.8 billion, a 4% decline from the previous year, primarily attributed to a 10% drop in iPhone sales, signalling potentially subdued demand for its latest smartphone models released in September.
Amidst these figures, concerns loom over Apple’s operations in China, its third-largest market, where stiff competition from local champion Huawei has contributed to a 19% decline in sales, according to Counterpoint Research. However, amidst the challenges, Apple’s services division shines a beacon of hope, with a remarkable 14.2% rise in sales, reaching a historic high of $23.9 billion.
Nevertheless, Apple’s net income dipped by 2%, landing at $23.64 billion, with earnings per share at $1.53, highlighting the complexities of navigating today’s ever-evolving tech landscape. Despite these hurdles, Apple remains steadfast in its commitment to shareholders, as evidenced by its board of directors’ authorization of a $110 billion stock repurchase program. As Apple continues to navigate the intricacies of the global market, investors eagerly await its strategies to reignite growth and innovation in the coming quarters.
Technical
Apple’s stock is currently experiencing a downtrend, which is evident from its position below the 100-day moving average. The descending channel pattern further validates this downward trajectory, with four consecutive months of losses indicating prevailing bearish sentiment among investors.
Recently, the stock found support at $164.08 per share after notable buying interest emerged following five consecutive days of decline. However, the rebound was short-lived as the share price was propelled towards the $176.03 per share level, aligning with the upper boundary of the descending channel pattern. Yet, a resurgence of selling volumes preceded the earnings results, leading to back-to-back days of losses.
Looking ahead, if selling sentiment persists, a retest of the $164.08 per share support level seems likely. Conversely, a breakthrough above the $176.03 per share resistance level could signal bullish intent, potentially attracting buying interest towards the 100-day moving average. As investors monitor these key levels, market sentiment will play a crucial role in determining the stock’s future price action.
Summary
Apple’s Q2 earnings depict a mixed bag, with revenue declining 4% due to sluggish iPhone sales but a bright spot in services. Technical analysis indicates support at $164.08 per share and resistance at $176.03 per share, pivotal in shaping future price action.
Sources: Apple Inc, Reuters, Counterpoint Research, Dow Jones Newswires, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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