American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Politics

Apple labeled a ‘low-growth stock’ despite record Q1 margins—here’s why

by admin February 1, 2025
February 1, 2025
Apple labeled a ‘low-growth stock’ despite record Q1 margins—here’s why

Apple Inc (NASDAQ: AAPL) saw its gross margin hit a record in its fiscal first quarter on the back of continued momentum in its services business that helped offset the weakness in iPhone sales.

But that wasn’t enough for Dan Niles to change his view on the tech titan.

Niles continues to see Apple as a “low growth stock with a high multiple” and sees a few of the other mega-cap names like Meta Platforms and Microsoft as better picks for 2025.

Apple stock is currently up nearly 10% versus its year-to-date low.

What’s behind Apple’s slow top-line growth?

Niles is dovish on Apple shares as they’re currently trading at a massive premium to the broader market even though the company has grown revenue by only 5.0% in three years.

Plus, the iPhone maker is losing market share in China which suggests it’s struggling to remain competitive.

“The AI rollout has been slow, and what they’re offering, people aren’t all that excited about. That’s why we’ve got this slow-growing top-line,” he told CNBC in an interview today.  

Apple stock, however, remains somewhat more attractive for income investors as it pays a dividend yield of 0.41% at writing.

Could DeepSeek be a benefit for Apple stock?

Nile agreed that DeepSeek’s new AI model which is allegedly more powerful than the US mega-cap’s LLMs but costs significantly less to build and operate could help Apple Intelligence.

But the related benefit in terms of an upgrade cycle could take until next year to materialize for Apple, according to the founder of Niles Investment Management.

Additionally, the Nasdaq-listed firm “wasn’t spending too much on it anyways,” which is why the impact may not be meaningful for Apple Inc., he added.

That said, it’s important to note that AAPL investors, nonetheless, have been a happy lot since early 2020, given the company’s stock price has roughly quadrupled during that period.

What AAPL expects for its fiscal Q2

In the current quarter, Apple said its services business will likely grow in the low double digits but the overall growth may remain in the mid-single digits on an annualized basis.

The tech behemoth expects a strong dollar to be a 2.5% headwind for sales in Q2.

Note that Niles’s pessimism is not broadly shared by Wall Street analysts. The consensus rating on Apple stock currently sits at “overweight”.

That’s when the company’s iPhone sales printed at $69.14 billion in its fiscal first quarter – significantly weaker than the $71.03 billion that experts had forecast.

Analysts may be focusing more on AAPL’s services revenue of $26.34 billion which handily topped Street estimates of $26.09 billion and helped its gross margin come in at a record 46.9% in Q1.

The post Apple labeled a ‘low-growth stock’ despite record Q1 margins—here’s why appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Portugal’s Novo Banco to launch IPO amid bank consolidation speculation
next post
Why did Goldman Sachs upgrade Brazil’s Ultrapar to ‘buy’?

Related Posts

Biden considered resigning vice presidency ‘in protest’ over...

February 9, 2024

Trump tells Israel to ‘finish up’ Gaza offensive...

March 27, 2024

With 26 days until voting starts, ‘election season’...

August 11, 2024

Robert F. Kennedy Jr. expected to announce wealthy...

March 28, 2024

European stocks climb as tariff relief offers brief...

April 14, 2025

IDF claims photos show Hamas combatants inside UN...

May 17, 2024

Secret Service admits leaning on ‘state and local...

July 21, 2024

US says Israel has not received all requested...

March 31, 2024

Progressive champion and two-time presidential candidate Sen. Bernie...

May 8, 2024

Axelrod criticizes Trump for mocking Biden’s stutter: ‘Pathetic...

March 13, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • GMS stock jumps 29% on takeover interest from Home Depot, QXO, analysts raise PTs

      June 22, 2025
    • Japan’s rice price surge: what’s driving it and why it could spark a political crisis

      June 22, 2025
    • BofA raises STOXX 600 target amid resilient global growth, warns on Mideast risks

      June 22, 2025
    • Palantir co-founder: US must prevent Iranian nukes

      June 22, 2025
    • Fed governor Waller advocates for July rate cut amid tariff, labor market outlook

      June 21, 2025

    Categories

    • Business (3,199)
    • Investing (2,531)
    • Latest News (2,000)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved